Important things about AR Automation

accounts receivable automation

Are you familiar with 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 a while now and much of the conventional bank lockbox's lifespan has been used for processing payment information associated with payments made by check. Mainstream 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 get 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 customers A/R workforce and increases their productivity. The price of the bank lockbox is usually a monthly cost along with a per line remittance data processing cost. To process a huge number 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 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 often is relatively costly . Banks usuallyearn a monthly fee as well as a per line rate associated withhandling payment remittance detail .

Lockboxes can contain security concerns . The standard more info bank lockbox still takes 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 contractor . The details from the lockbox gives you all required elements to make a fraudulent check .

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

Financial Institution Lockboxes Are Creating problems for your Customers' AP Department . Organizations are modernizing their AP Department to eliminate manual task and deciding to pay their customers electronically via ACH , Credit Card or vCard . These desired methods of ePayment are generating an increase in email remittance . FinTech solution companies have bridged the gap to supportthose organizations in a cost click here effective scalable solution for automating Accounts Receivable . check here

Benefits of a FinTech Lockbox
Reduced Cost


The major objective of the FinTech Lockbox is usually to decreasepricing per transaction and supply an Accounts Receivable automation application to helpcompanies to QUICKLY 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 get payment data . The AR Lockbox gives you a single destination to house All of your incoming electronic payments created for faster 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 by means of the postal service . With the increase in B2B payments electronically , mail float is rapidly turning into a productof the past . The increasing amount of electronic payments embracing FinTech Lockboxes with an essential focus on the rate reduction and speed at which you clear cash and apply it to your working capital .


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