Benefits of using AR Automation

accounts receivable automation

Are you familiar with the advantages of accounts receivable automation? Traditionally, a bank lockbox has been used by organization Accounts Receivable departments to increase efficiency.

Lockboxes have been around for decades and much of the conventional bank lockbox's life has been utilized for capturing payment information associated with payments made by check. Big offered this benefit to improve effectiveness and flow of company transactions streamlining the accounts receivables collection method.

Clients basically leverage 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 company’s Days Sales Outstanding (DSO). Banks receive 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 productivity. The price of the bank lockbox is typically a monthly fee along with a per line remittance data processing cost. To process a huge amount of checks over time can be pricey with a lockbox.

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

Weaknesses of a Traditional Bank Lockbox



The lockbox is usually fairly expensive . Banks typicallyacquire a monthly rate along with a per line fee linked tohandling payment remittance detail .

Lockboxes may contain security concerns . The traditional bank lockbox still requires a fair amount of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative personnel who are a novice to the bank or an outsourced contractor . The information from the lockbox provides all essential elements to make a fraudulent check .

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

Standard Bank Lockboxes Are Creating a predicament for your Customers' AP Department . Companies are modernizing their more info AP Department to eradicate manual task and deciding to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are generating an increase in email remittance . FinTech solution businesses have bridged the gap to aidthose businesses in a cost efficient scalable solution for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduction Cost


The main objective of the FinTech Lockbox is usually to lowerpricing per transaction and provide an Accounts Receivable automation program to letcompanies to rapidly clear cash and improve use of your working capital .

Simple payment trail
It is simple to track incoming ePayments in 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 destination to house ALL your incoming electronic payments created for speedier cash application .
Removes mail float
Mail float is a term for the time needed for a check to go from the payer to the payee by means of the postal service . With the rise in B2B payments electronically , mail float is rapidly turning into a productof the past . The improvement 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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