Attributes 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 efficiency.

Lockboxes have been around for many years and a lot of the conventional bank lockbox's lifespan has been utilized for capturing payment data associated with payments made by check. Commercial banks offered this benefit to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

Customers basically leverage 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 helps 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 client. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their efficiency. The cost of the bank lockbox is usually a monthly cost along with a per line remittance data processing cost. To process a large amount of checks over time can be costly with a lockbox.

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

Pitfalls of a Traditional Bank Lockbox



The lockbox is usually fairly high priced . Banks generallyacquire a monthly rate along with a per line rate related tohandling payment remittance detail .

Lockboxes can include security concerns . The traditional bank lockbox still requires a decent level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative more info personnel who are a novice to the bank or an outsourced service provider . The information from the lockbox gives you all vital elements to generate a fraudulent check .

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

Commercial Bank Lockboxes Are Causing issues for your Customers' AP Department . Corporations are modernizing their AP Department to eliminate manual task and preferring to pay their customers electronically via ACH , Credit Card or vCard . These desired methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to aidthose businesses here in a cost effective scalable alternative for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduced Cost


The main goal of the FinTech Lockbox is to reducecost per transaction and provide an Accounts Receivable automation tool to letorganizations to rapidly clear cash and facilitate access to your working capital .

Trouble-free payment trail
You can easily track incoming ePayments from one location. Instead of flipping through remittance emails or going to the ar automation solutions vendor portal to download payment data . The AR Lockbox gives you a single location to hold All of your incoming electronic payments made for more rapid cash application .
Gets rid of mail float
Mail float is a term for the time required for a check to go from the payer to the payee via the postal service . With the rise in B2B payments electronically , mail float is swiftly becoming a productof the past . The increase in electronic payments embracing FinTech Lockboxes with an essential focus on the rate reduction and speed in which you clear cash and apply it to your working capital .


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