Attributes of Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for a while now and much of the conventional bank lockbox's life has been utilized for processing payment data associated with payments made by check. Commercial banks offered this service to improve effectiveness and flow of business transactions simplifying the accounts receivables collection method.

Customers generally leverage 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 business’ Days Sales Outstanding (DSO). Banks get the paper check, process it along with the remittance data and send the data back to their customer. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their efficiency. The cost of the bank lockbox is typically a monthly fee along with a per line remittance data processing fee. To process a huge amount of checks over time can be pricey with a lockbox.

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

Disadvantages of a Traditional Bank Lockbox



The lockbox is often rather costly . Banks commonlyacquire a monthly rate along with a per line fee associated withhandling payment remittance detail .

Lockboxes may contain security concerns . The standard bank lockbox still requires a fair level of manual re-keying information . With the majority of manual data entry attendance read more being entry level-administrative staff who are a novice to the bank or an outsourced contractor . The details from the lockbox can provide all essential components to make a fraudulent check .

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

Standard Bank Lockboxes Are Causing problems for your Customers' AP Department . Businesses are modernizing their AP Department to get rid of manual process and preferring to pay their clients electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the website gap to assistthose firms in a cost effective scalable alternative for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduction Cost


The primary objective of the FinTech Lockbox will be to lowerfees per transaction and provide an Accounts Receivable automation program to helpbusinesses to QUICKLY clear cash and facilitate access to your working capital .

Easy payment trail
It is easy to track incoming ePayments from one place. Instead of flipping through remittance emails or going to the vendor portal to get payment data . The AR Lockbox provides you with a single location check here to hold ALL your incoming electronic payments made for faster cash application .
Eliminates mail float
Mail float is a term for the time needed for a check to go from the payer to the payee via the postal service . With the rise in B2B payments electronically , mail float is rapidly turning into a productof the past . The rise in electronic payments choosing FinTech Lockboxes with a significant focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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