Advantages of AR Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the conventional bank lockbox's lifespan has been used for processing payment information associated with payments made by check. Mainstream offered this benefit to improve effectiveness and flow of business transactions simplifying the accounts receivables collection method.

Clients basically 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 information back to their client. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their efficiency. The price of the bank lockbox is typically a monthly fee along with a per line remittance data processing cost. To process a large amount of checks over time can be expensive with a lockbox.

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

Disadvantages of a Traditional Bank Lockbox



The lockbox often is somewhat costly . Banks typicallyacquire a monthly fee as well as a per line fee linked toprocessing payment remittance detail .

Lockboxes may contain security issues . The traditional bank lockbox still takes a fair amount of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative staff who are new to the bank or an outsourced service provider . The data from the lockbox provides all necessary elements to create a fraudulent check .

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

Traditional Bank Lockboxes Are Causing problems for your Customers' AP Department . Corporations are modernizing their AP Department to remove manual task and deciding to pay their customers electronically via ACH , Credit Card or vCard . These desired methods of ePayment are generating an increase in email remittance . FinTech solution companies have bridged the gap to assistthose organizations in a cost effective scalable option for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduction Cost


The primary goal of the FinTech Lockbox is to lowercost per transaction and supply an Accounts Receivable automation program to allowbusinesses to QUICKLY get more info clear cash and improve use of your working capital .

Easy payment trail
It is simple to track incoming ePayments from one location. Rather than flipping through remittance emails or heading to the vendor portal to get payment data . The AR Lockbox gives you one place to house All of your incoming electronic payments produced for swifter cash website application .
Eliminates mail float
Mail float is a term for the time required for a check to travel from the payer to the payee through the postal service . With the increase in B2B payments electronically , mail float is swiftly turning into a productof the past . The rise in electronic payments using FinTech Lockboxes with a major focus on the cost reduction and speed in which you clear cash and apply it to your working capital .


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