Aspects of AR Automation

accounts receivable automation

Are you familiar with the advantages 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 life has been used for processing payment data associated with payments made by check. Mainstream provided this benefit 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 reduce mail delivery time, which also assists with lowering the business’ Days Sales Outstanding (DSO). Banks receive the paper check, process it along with the remittance data and send the data back to their client. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their efficiency. The price of the bank lockbox is usually a monthly cost along with a per line remittance data processing fee. To process a huge number of checks over time can be expensive with a lockbox.

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

Weaknesses of a Traditional Bank Lockbox



The lockbox is usually rather high priced . Banks typicallyearn a monthly rate as well as a per line rate connected toprocessing payment remittance detail .

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

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

Standard Bank Lockboxes Are Creating a predicament for your Customers' AP Department . Businesses are modernizing their AP Department to eliminate manual process and opting to pay their customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are generating an increase in email remittance . FinTech solution businesses have bridged the gap to aidthose companies in an economical scalable solution for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduction Cost


The main objective of the FinTech Lockbox is usually to decreasepricing per transaction and provide an Accounts Receivable automation program to permitcompanies to rapidly clear cash and facilitate access to your working capital .

Easy payment trail
You can easily track incoming ePayments from one location. Instead of flipping through remittance emails or going to the vendor portal to get payment data . The AR Lockbox gives you a single spot for a hold ALL your incoming electronic payments created for check here speedier cash application .
Removes mail float
Mail float is a term for the time required for a check to travel from the payer to the payee through the postal service . With the rise in B2B payments electronically , mail float is rapidly becoming a thingof the past . The improvement in electronic payments using FinTech Lockboxes with a primary focus on the here rate reduction ar lockbox and speed at which you clear cash and apply it to your working capital .


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