Benefits of AR Automation

accounts receivable automation

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

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

Customers generally use the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are purposefully placed in a central location to decrease 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 information 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 typically a monthly fee along with a per line remittance data processing cost. To process a large number of checks over time can be expensive with a lockbox.

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

Pitfalls of a Traditional Bank Lockbox



The lockbox often is rather high priced . Banks typicallyacquire a monthly rate in addition to a per line rate related tohandling payment remittance detail .

Lockboxes can contain security issues . The standard bank lockbox still requires a fair level of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative staff 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 the check here payments and remittance information thenforward you the information . Your team still must input that information into your ERP to clear the cash .

Standard Bank Lockboxes Are Causing difficulty for your Customers' AP Department . Corporations are modernizing their AP Department to eliminate manual process and preferring to pay their customers 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 servethose businesses in a cost effective scalable option for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduction Cost


The primary objective of the FinTech Lockbox is to reducecost per transaction and supply an Accounts Receivable automation program to helporganizations to rapidly clear cash and improve use of your working capital here .

Simple payment trail
It is simple to track incoming ePayments in one place. Rather than flipping through remittance emails or heading to the vendor portal to get payment data . The AR Lockbox gives you a single spot for a house All of your incoming electronic payments meant for quicker cash application .
Eliminates mail float
Mail float is a term for the time required for a check to travel from the payer to the payee via the postal service . With the increase in B2B payments electronically , mail float is rapidly turning into a productof the past . The increase in electronic payments embracing FinTech Lockboxes with a significant focus on the price reduction and speed at which you clear cash check here and apply it to your working capital .


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