Benefits of using AR Automation

accounts receivable automation

Are you familiar with the benefits 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 conventional bank lockbox's lifespan has been utilized for processing payment information associated with payments made by check. Mainstream offered this amenity to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

Customers generally 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 helps 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 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 expensive with a lockbox.

Today, we see a big 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 rather expensive . Banks normallyearn a monthly rate along with a per line fee related toprocessing payment remittance detail .

Lockboxes may include security concerns . The traditional bank lockbox still takes a fair level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative staff more info who are a novice to the financial institution or an outsourced service provider . The details from the lockbox gives you all essential elements to generate a fraudulent check .

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

Traditional Bank Lockboxes Are Creating a Problem for your Customers' AP Department . Organizations are modernizing their AP Department to eradicate manual process and opting to pay their customers electronically via ACH , Credit Card or vCard . These desired methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to servethose corporations in an economical scalable alternative for automating Accounts Receivable .

Pros of a FinTech Lockbox
Reduction Cost


The main objective of the FinTech Lockbox will be to reducecost per transaction and provide an Accounts Receivable automation application to letorganizations to rapidly clear cash and facilitate use of your working capital .

Trouble-free payment trail
You can easily track incoming ePayments in one place. Rather than flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox gives you a single spot for a house All of your incoming electronic payments created for speedier 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 way of the postal service . With the rise in B2B payments electronically , mail float is rapidly becoming a productof the past . The rise in electronic payments using 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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