Features of AR 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 capturing payment data associated with payments made by check. Mainstream offered this service to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

Customers basically 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 company’s 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 cost of the bank lockbox is typically a monthly fee along with a per line remittance data processing cost. To process a large amount 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 revolutionized the FinTech business with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Drawbacks of a Traditional Bank Lockbox



The lockbox is usually rather high priced . Banks typicallyacquire a monthly fee along with a per line rate related toprocessing payment remittance detail .

Lockboxes may contain security issues . The traditional bank lockbox still requires a fair measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative workers who are a novice to the bank or an outsourced service provider . The details from the lockbox gives you all vital elements to make a fraudulent check .

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

Standard Bank Lockboxes Are Creating difficulty for your Customers' AP Department . Businesses are modernizing their AP Department to remove manual task and preferring 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 organizations in an economical scalable option for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduction Cost


The main objective of the FinTech Lockbox is usually to reducecost per transaction and provide an Accounts Receivable automation application to helporganizations to QUICKLY clear cash and facilitate use of your working capital .

Simple payment trail
It is simple to track incoming ePayments from one place. Rather than flipping through remittance emails or heading to the vendor portal to get payment information . The AR Lockbox provides you with one location to hold ALL your incoming electronic payments made for faster 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 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 adopting FinTech Lockboxes with a major focus on the cost reduction and speed at which you clear cash and apply it to your working capital .


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