Features of Accounts Receivable Automation

accounts receivable automation

Do you know the benefits of accounts receivable automation? Conventionally, a bank lockbox has been used by business Accounts Receivable departments to increase expediency.

Lockboxes have been around for decades and a lot of the conventional bank lockbox's lifespan 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.

Clients basically use the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are strategically placed in a central location to decrease mail delivery time, which also helps with lowering the business’ Days Sales Outstanding (DSO). Banks receive 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 productivity. The cost 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 pricey with a lockbox.

Today, we see a drastic change with Accounts Payable Departments paying electronically. This change to ePayments has elevated the FinTech trade 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 high priced . Banks commonlyearn a monthly fee as well as a per line rate associated withhandling payment remittance detail .

Lockboxes can include security issues . 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 personnel who are new to the financial institution or an outsourced contractor . The data from the lockbox provides all required elements to generate a fraudulent check .

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

Financial Institution Lockboxes Are Causing issues for your Customers' AP Department . Businesses are modernizing their website AP Department to eliminate manual task and deciding to pay their clients electronically via ACH , Credit Card or vCard . These preferred methods of ePayment website are producing an increase in email remittance . FinTech solution businesses have bridged the gap to aidthose organizations in a cost effective scalable solution for automating Accounts Receivable .

Benefits of a FinTech Lockbox
Reduced Cost


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

Trouble-free payment trail
You can easily track incoming ePayments from one location. Rather than flipping through remittance emails or going to click here the vendor portal to download payment information . The AR Lockbox gives you a single spot for a house ALL your incoming electronic payments made for quicker cash application .
Eliminates 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 turning into a thingof the past . The improvement in electronic payments adopting FinTech Lockboxes with a primary focus on the rate reduction and speed in which you clear cash and apply it to your working capital .


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