Best things about Accounts Receivable Automation

accounts receivable automation

Are you familiar with the advantages of accounts receivable automation? Conventionally, a bank lockbox has been used by company Accounts Receivable departments to increase expediency.

Lockboxes have been around for a while now and a lot of the traditional bank lockbox's life has been used for capturing payment information associated with payments made by check. Big provided this amenity to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Customers basically leverage the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are strategically placed in a central location to decrease mail delivery time, which also helps with lowering the company’s Days Sales Outstanding (DSO). Banks get the paper check, process it along with the remittance data and send the data back to their client. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their productivity. The cost of the bank lockbox is typically a monthly cost along with a per line remittance data processing cost. To process a huge amount of checks over time can be costly with a lockbox.

Today, we see a huge shift with Accounts Payable Departments paying electronically. This change to ePayments has revolutionized the FinTech trade with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Disadvantages of a Traditional Bank Lockbox



The lockbox is often fairly costly . Banks generallyearn a monthly fee as well as a per line rate connected tohandling payment remittance detail .

Lockboxes can include security issues . The traditional bank lockbox still takes a decent measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are new to the bank or an outsourced contractor . The details from the lockbox provides all essential elements to create a fraudulent check .

Lockboxes don’t tie into your accounting system . Bank lockboxes process the payments and remittance information thensend you the information . Your personnel still must key in that information into your ERP to clear the cash .

Commercial Bank Lockboxes Are Creating more info a predicament for your Customers' AP Department . Organizations are modernizing their AP Department to get rid of manual task and preferring to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are generating an increase in email remittance . FinTech solution companies have bridged the gap to assistthose corporations in a cost efficient scalable solution for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduction Cost


The main goal of the FinTech Lockbox would be to lowercost per transaction and supply an Accounts Receivable automation program to letcompanies to QUICKLY clear cash and facilitate use of your working click here capital .

Trouble-free payment trail
It is easy to track incoming ePayments in one location. Rather than flipping through remittance emails or heading to the vendor portal to here download payment information . The AR Lockbox provides you with a single spot for a hold ALL your incoming electronic payments created for faster cash application .
Gets rid of mail float
Mail float is a term for the time required for a check to go from the payer to the payee through the postal service . With the rise in B2B payments electronically , mail float is swiftly becoming a thingof the past . The improvement in electronic payments using FinTech Lockboxes with a primary focus on the fee reduction and speed at which you clear cash and apply it to your working capital .


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