Features of Accounts Receivable Automation

accounts receivable automation

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

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

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 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 productivity. The cost of the bank lockbox is usually a monthly fee along with a per line remittance data processing fee. To process a large number of checks over time can be pricey with a lockbox.

Today, we see a big shift 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 could be rather expensive . Banks usuallyacquire a monthly fee in addition to a per line rate associated withhandling payment remittance detail .

Lockboxes may contain 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 a novice to the financial institution or an outsourced contractor . The data website from the lockbox can provide all needed elements to produce a fraudulent check .

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

Commercial Bank Lockboxes Are Causing issues for your Customers' AP Department . Organizations are modernizing their AP Department to get rid of manual task and opting to pay their customers 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 companies in a cost efficient scalable alternative for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduced Cost


The major objective of the FinTech Lockbox is to decreasefees per transaction and supply an Accounts Receivable automation program to helporganizations to rapidly clear cash and facilitate access to your working capital .

Simple payment trail
It is simple to track incoming ePayments from one location. Instead of flipping through remittance emails or going to the vendor portal to download payment data . The AR Lockbox gives you a single destination to house All of your incoming electronic payments meant for swifter cash application .
Removes mail float
Mail float is a term for the time required 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 swiftly becoming a thingof the past . The improvement in electronic payments using FinTech Lockboxes with a major focus on the rate reduction and speed at which you clear cash and apply it to your working capital .


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