Best 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 expediency.

Lockboxes have been around for decades and much of the traditional bank lockbox's lifespan has been used for capturing payment information associated with payments made by check. Commercial banks provided this service to improve effectiveness and flow of business transactions streamlining 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 reduce mail delivery time, which also helps with lowering the business’ Days Sales Outstanding (DSO). Banks get 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 price of the bank lockbox is typically a monthly fee along with a per line remittance data processing cost. To process a large amount 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 revolutionized the FinTech business with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Downsides of a Traditional Bank Lockbox



The lockbox is often somewhat expensive . Banks normallyearn a monthly fee in addition to a per line fee connected toprocessing payment remittance detail .

Lockboxes can include security concerns . The traditional bank lockbox still takes a fair amount of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative staff who are new to the bank or an outsourced service provider . The information click here from the lockbox provides all needed elements to create 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 key in that information into your ERP to clear the cash .

Commercial Bank Lockboxes Are Creating issues for your Customers' AP more info Department . Companies are modernizing their AP Department to remove manual process and opting to pay their clients electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are creating an increase in email remittance . FinTech solution companies have bridged the gap to helpthose businesses in a cost efficient scalable solution for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduction Cost


The main objective of the FinTech Lockbox is to lowerfees per transaction and supply an Accounts Receivable automation application to permitbusinesses to rapidly clear cash and improve use of your working capital .

Easy payment trail
It is easy to track incoming ePayments from one location. Instead of flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox provides you with one spot for a hold All of your incoming electronic payments produced for more rapid cash application .
Eliminates mail float
Mail float is a term for the time needed for a check to go from the payer to the payee via the postal service . With the increase in B2B payments electronically , mail float is swiftly becoming a productof the past . The increase in electronic payments embracing FinTech Lockboxes with an essential focus on the cost reduction and speed at which you clear cash and apply it to your working capital .


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