Advantages of AR 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 expediency.

Lockboxes have been around for a while now and a lot of the traditional bank lockbox's lifespan has been used for capturing payment data associated with payments made by check. Mainstream provided this service to improve effectiveness and flow of company transactions streamlining the accounts receivables collection process.

Customers 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 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 clients 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 huge amount of checks over time can be pricey with a lockbox.

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

Downsides of a Traditional Bank Lockbox



The lockbox is often fairly costly . Banks usuallyacquire a monthly rate as well as a per line rate linked toprocessing payment remittance detail .

Lockboxes may include security concerns . The standard bank lockbox still requires a fair measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative personnel who are new to the financial institution or an outsourced contractor . The details from the here lockbox provides all vital components to produce a fraudulent check .

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

Financial Institution Lockboxes Are Creating difficulty for your Customers' AP Department . Businesses are modernizing their AP Department to get rid of manual process and opting to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to supportthose businesses in a cost effective scalable alternative for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduction Cost


The main goal of the FinTech Lockbox is to lowerpricing per transaction and supply an Accounts Receivable automation tool to helporganizations to 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 here . The AR Lockbox gives you a single location to hold ALL your incoming electronic payments meant for speedier cash application .
Removes 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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