Aspects of Accounts Receivable Automation

accounts receivable automation

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

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

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

Bank lockboxes are strategically placed in a central location to reduce mail delivery time, which also assists with lowering the business’ Days Sales Outstanding (DSO). Banks get the paper check, process it along with the remittance data and send the information 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 usually a monthly fee along with a per line remittance data processing cost. To process a huge number of checks over time can be pricey with a lockbox.

Today, we see a huge 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.

Disadvantages of a Traditional Bank Lockbox



The lockbox is usually somewhat costly . Banks generallyearn a monthly fee as well as a per line rate connected toprocessing payment remittance detail .

Lockboxes may include security concerns . The traditional bank lockbox still requires a decent level of manual re-keying data . 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 details from the lockbox gives you all crucial components to create a fraudulent check .

Lockboxes don’t tie into your accounting system . 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 .

Commercial Bank Lockboxes Are Causing a predicament for your Customers' AP Department . Organizations are modernizing their AP Department to eradicate manual process and opting to pay their customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to supportthose firms in a cost efficient scalable solution for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduction Cost


The main goal of the FinTech Lockbox is usually to reducefees per transaction and provide an Accounts Receivable automation tool to helpcompanies to QUICKLY clear cash and improve use of your working capital .

Easy payment trail
You can easily track incoming ePayments in one location. Rather than flipping through remittance emails or heading to the vendor portal to download and read payment information . The AR Lockbox provides you with one destination to house ALL your incoming electronic payments produced for swifter cash application . more info
Removes mail float
Mail float is a term for the time required for a check to go from the payer to the payee from the postal service . With the rise in B2B payments electronically , mail float is quickly becoming a thingof the past . The improvement in electronic payments adopting 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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