Attributes 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 many years and much of the traditional bank lockbox's life has been utilized for processing payment information associated with payments made by check. Commercial banks provided this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection method.

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 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 usually a monthly fee 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 huge change with Accounts Payable Departments paying electronically. This shift to ePayments has elevated the FinTech business with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Weaknesses of a Traditional Bank Lockbox



The lockbox is often fairly costly . Banks normallyearn a monthly fee along with a per line fee connected withhandling payment remittance detail .

Lockboxes can contain security issues . The standard bank lockbox still requires a decent measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative workers who are new to the bank or an outsourced service provider . The details from the lockbox can provide all essential components to create a fraudulent check .

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

Financial Institution Lockboxes Are Creating a Problem for your Customers' AP Department . Organizations are modernizing their AP Department to eliminate manual process and opting to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are creating an increase in more info email remittance . FinTech solution companies have bridged the gap to aidthose businesses in a cost efficient scalable alternative for automating Accounts Receivable .

Features of a FinTech Lockbox
Reduction Cost


The major objective of the FinTech Lockbox is usually to lowerpricing per transaction and supply an Accounts Receivable automation application to letbusinesses to QUICKLY clear cash and facilitate use of your working capital .

Simple payment trail
It is simple to track incoming ePayments in one place. Rather than flipping through remittance emails or going to the vendor portal to get payment information . The AR Lockbox provides you with one place to hold ALL your incoming electronic payments meant for quicker cash application .
Gets rid of mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee by means of the postal service . With the rise in B2B payments electronically , mail float is quickly becoming a thingof the past . The increase in electronic payments using FinTech Lockboxes with a major focus on the cost reduction and speed in which you clear cash and apply it to your working capital .


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