Benefits of using 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 much of the conventional bank lockbox's lifespan has been used for capturing payment data associated with payments made by check. Mainstream offered this benefit to improve effectiveness and flow of company transactions simplifying the accounts receivables collection method.

Customers basically 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 data back to their customer. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their efficiency. The cost of the bank lockbox is typically a monthly fee along with a per line remittance data processing cost. To process a huge number of checks over time can be costly with a lockbox.

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

Shortcomings of a Traditional Bank Lockbox



The lockbox is often rather high priced . Banks commonlyacquire a monthly fee in addition to a per line fee linked toprocessing payment remittance detail .

Lockboxes can contain security concerns . The traditional bank lockbox still takes a decent level of manual re-keying information . 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 data from the lockbox gives you all essential elements to make a fraudulent check .

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

Standard Bank Lockboxes Are Causing issues for your Customers' AP Department . Corporations are modernizing their AP Department to eliminate manual more info process and preferring to pay their customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are creating an increase in email remittance . FinTech solution companies have bridged the gap to assistthose businesses in a cost efficient scalable option for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduced Cost


The primary objective of the FinTech Lockbox will be to lowercost per transaction and provide an Accounts Receivable automation program to alloworganizations to QUICKLY clear cash and facilitate access to your working capital .

Easy payment trail
It is easy to track incoming ePayments in one location. Instead of flipping through remittance emails or heading to the vendor portal to download and read payment data . The AR Lockbox provides you with one place to house ALL your incoming electronic payments meant for faster cash application .
Gets rid of mail float
Mail float is a term for the time needed for a check to go from the payer to the payee by way of the postal service . With the increase in B2B payments electronically , mail float is rapidly turning into a thingof the past . The increasing amount of electronic payments choosing FinTech Lockboxes with an essential focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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