Benefits from Accounts Receivable Automation

accounts receivable automation

Do you know the benefits of accounts receivable automation? Conventionally, a bank lockbox has been used by organization Accounts Receivable departments to increase efficiency.

Lockboxes have been around for decades and a lot of the conventional bank lockbox's lifespan has been utilized for capturing payment data associated with payments made by check. Big offered this benefit 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 purposefully placed in a central location to reduce mail delivery time, which also assists 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 client. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their efficiency. The cost of the bank lockbox is usually a monthly cost along with a per line remittance data processing fee. To process a huge number of checks over time can be expensive with a lockbox.

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

Downsides of a Traditional Bank Lockbox



The lockbox can be fairly expensive . Banks generallyacquire a monthly rate in addition to a per line fee associated withprocessing payment remittance detail .

Lockboxes can contain security concerns . The traditional bank lockbox still requires a decent measure of manual re-keying information . With the majority of get more info manual data entry attendance being entry level-administrative workers who are new to the financial institution or an outsourced service provider . The details from the lockbox provides all vital elements to produce a fraudulent check .

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

Standard Bank Lockboxes Are Creating problems for your Customers' AP Department . Businesses are modernizing their AP Department to get rid of manual task and deciding to pay their customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are generating an increase in email remittance . FinTech solution businesses have bridged the gap to helpthose firms in a cost efficient scalable solution for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduced Cost


The primary objective of the FinTech Lockbox is to website lowercost per transaction and produce an Accounts Receivable automation tool to alloworganizations to QUICKLY clear cash and facilitate use of your working capital .

Easy payment trail
You can easily track incoming ePayments from one location. Instead of flipping through remittance emails or going to the vendor portal to get payment information . The AR Lockbox provides you with a single location to hold All of your incoming electronic payments produced for swifter cash application .
Removes mail float
Mail float is a term for the time required for a check to travel from the payer to the payee from the postal service . With the increase in B2B payments electronically , mail float is quickly turning into a productof the past . The improvement in electronic payments adopting FinTech Lockboxes with a primary focus on the rate reduction and speed in which you clear cash and apply it to your working capital .


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