Reasons for Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for a while now and a lot of the conventional bank lockbox's life has been used for capturing payment information associated with payments made by check. Mainstream offered this service to improve effectiveness and flow of business transactions simplifying the accounts receivables collection method.

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

Bank lockboxes are purposefully placed in a central location to reduce 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 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 usually a monthly cost along with a per line remittance data processing fee. To process a large amount of checks over time can be pricey with a lockbox.

Today, we see a big change with Accounts Payable Departments paying electronically. This change to ePayments has revolutionized 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 rather costly . Banks generallyacquire a monthly fee along with a per line rate connected withprocessing payment remittance detail .

Lockboxes can include security concerns . The standard bank lockbox still takes a fair amount of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative staff who here are a novice to the bank or an outsourced service provider . The data from the lockbox gives you all vital components to generate a fraudulent check .

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

Standard Bank Lockboxes Are Causing difficulty for your Customers' AP Department . Organizations are modernizing their AP Department to eradicate manual process and preferring 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 companies have bridged the gap to assistthose corporations in a cost efficient scalable solution for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduced Cost


The primary objective of the FinTech Lockbox will be to decreasepricing per transaction and supply an Accounts Receivable automation tool to allowcompanies to rapidly clear cash and improve access to your working capital .

Simple payment trail
You can easily track incoming ePayments in one place. Rather than flipping through remittance emails or heading to the vendor portal to download payment information . The AR Lockbox provides you with a single location to hold All of your incoming electronic payments created for quicker 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 via the postal service . With the increase in B2B payments electronically , mail float is rapidly becoming a thingof the past . The improvement in electronic payments adopting 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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