Benefits of using AR Automation

accounts receivable automation

Are you aware of the benefits of accounts receivable automation? Traditionally, 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 conventional bank lockbox's life has been utilized for processing payment information associated with payments made by check. Commercial banks offered this service to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

Clients basically use the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are strategically placed in a central location to reduce 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 clients A/R workforce and increases their productivity. The price of the bank lockbox is usually a monthly fee along with a per line remittance data processing fee. To process a large number of checks over time can be pricey with a lockbox.

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

Shortcomings of a Traditional Bank Lockbox



The lockbox is usually somewhat expensive . Banks commonlyearn a monthly rate as well as a per line rate linked tohandling payment remittance detail .

Lockboxes may include security issues . The standard bank lockbox still takes a fair measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative workers who are a novice to the financial institution or an outsourced contractor . The details from the lockbox provides all necessary elements to produce a fraudulent check .

Lockboxes don’t connect into your accounting program . Bank lockboxes process your payments and remittance data thenforward you the information . Your team still must enter that information into your ERP to clear the cash .

Traditional Bank read more Lockboxes Are Creating difficulty for your Customers' AP Department . Corporations are modernizing their AP Department to eliminate manual task and preferring to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment get more info are generating an increase in email remittance . FinTech solution companies have bridged the gap to supportthose firms in a cost effective scalable solution for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduced Cost


The main objective of the FinTech Lockbox will be to decreasefees per transaction and produce an Accounts Receivable automation application to allowbusinesses to rapidly clear cash and facilitate use of your working capital .

Easy payment trail
It is simple to track incoming ePayments in one location. Rather than flipping through remittance emails or heading to the vendor portal to download and read payment information . The AR Lockbox provides you with a single place to house ALL your incoming electronic payments created for quicker cash application .
Gets rid of mail float
Mail float is a term for the time needed for a check to go from the payer to the payee by way of the postal service . With the increase in B2B payments electronically , mail float is swiftly becoming a thingof the past . The increase in electronic payments choosing FinTech Lockboxes with a significant focus on the cost reduction and speed at which you clear cash and apply it to your working capital .


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