Benefits from Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for decades and a lot of the traditional bank lockbox's life has been used for capturing payment information associated with payments made by check. Commercial banks provided this service to improve effectiveness and flow of business transactions streamlining the accounts receivables collection process.

Clients 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 company’s 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 productivity. The cost of the bank lockbox is typically a monthly fee along with a per line remittance data processing fee. To process a large number of checks over time can be costly with a lockbox.

Today, we see a drastic change with Accounts Payable Departments paying electronically. This change 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 is often somewhat costly . Banks typicallyacquire a monthly fee as well as a per line fee connected toprocessing payment remittance detail .

Lockboxes can include security issues . The traditional bank lockbox still takes a decent amount of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are a novice to the bank or an outsourced contractor . The details from the lockbox can provide all crucial components to create a fraudulent check .

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

Financial Institution Lockboxes Are Creating difficulty for your Customers' AP Department . Companies are modernizing their AP Department to get rid of manual process and preferring 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 assistthose companies in a cost efficient scalable solution for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduction Cost


The major objective of the FinTech Lockbox is usually to decreasepricing per transaction and supply an Accounts Receivable automation tool to alloworganizations to website rapidly clear cash and improve use of your working capital .

Simple payment trail
You can easily track incoming ePayments from one place. Instead of flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox gives you a single location to hold ALL your incoming electronic payments meant for speedier cash application .
Eliminates mail float
Mail float is a term for the time needed 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 swiftly becoming a thingof the past . The rise in electronic payments choosing FinTech Lockboxes with an essential focus on the rate reduction and speed at which you clear cash and apply it to your working capital .


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