Reasons for Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for a while now and a lot of the conventional bank lockbox's life has been used for capturing payment information associated with payments made by check. Big provided this amenity to improve effectiveness and flow of company transactions streamlining the accounts receivables collection process.

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

Bank lockboxes are purposefully placed in a central location to decrease 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 information back to their customer. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their productivity. The price of the bank lockbox is typically a monthly fee along with a per line remittance data processing fee. To process a huge number of checks over time can be costly with a lockbox.

Today, we see a huge shift 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.

Shortcomings of a Traditional Bank Lockbox



The lockbox can be fairly high priced . Banks typicallyearn a monthly fee in addition to a per line rate connected tohandling payment remittance detail .

Lockboxes may include security issues . The standard bank lockbox still requires a fair amount 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 contractor . The details from the lockbox gives you all essential elements get more info to make a fraudulent check .

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

Traditional Bank Lockboxes Are Causing issues for your Customers' AP Department . Businesses are modernizing their AP Department to remove manual task and deciding to pay their clients 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 corporations in a cost efficient scalable alternative for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduction Cost


The primary objective of the FinTech Lockbox will be to decreasecost per transaction and provide an Accounts Receivable automation program to letbusinesses to rapidly clear cash and facilitate access to your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments in one location. Rather than flipping through remittance emails or heading to the vendor portal to download and read payment data . The AR Lockbox gives you read more one spot for a house ALL your incoming electronic payments produced for swifter cash application .
Eliminates 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 increase in B2B payments electronically , mail float is rapidly turning into a productof the past . The rise in electronic payments choosing FinTech Lockboxes with a significant focus on the rate read more reduction and speed in which you clear cash and apply it to your working capital .


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