Attributes of AR Automation

accounts receivable automation

Are you familiar with 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 many years and a lot of the conventional bank lockbox's life has been used for processing payment information associated with payments made by check. Big provided this amenity 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 purposefully placed in a central location to reduce mail delivery time, which also helps 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 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 fee. 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 change to ePayments has revolutionized the FinTech industry with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

Weaknesses of a Traditional Bank Lockbox



The lockbox can be fairly expensive . Banks normallyacquire a monthly rate along with a per line rate connected tohandling payment remittance detail .

Lockboxes may contain security concerns . The traditional bank lockbox still requires a fair measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative workers who are a novice to the bank or an outsourced service provider . The details from the lockbox gives you all essential elements to make a fraudulent check .

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

Standard Bank Lockboxes Are Causing a predicament for your Customers' AP Department . Organizations are modernizing their AP Department to eliminate manual task and preferring to pay their customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are creating an increase in email remittance . FinTech solution here businesses have bridged the gap to supportthose corporations in an economical scalable option for automating Accounts Receivable .

Advantages of a FinTech Lockbox
Reduction Cost


The major objective of the FinTech Lockbox is usually to decreasepricing per transaction and supply an Accounts Receivable automation program to permitorganizations to QUICKLY clear cash and improve access to your working capital .

Simple payment trail
It is easy to track incoming ePayments in one place. Rather than flipping through remittance emails or going to the vendor portal to get payment information . The AR Lockbox provides you with a single spot for a hold ALL your incoming electronic payments produced for faster cash application .
Eliminates mail float
Mail float is a term for the time required for a check to go from the payer to the payee through the postal service . With the increase in B2B payments electronically , mail float is swiftly turning into a thingof the past . The increasing amount of electronic payments choosing FinTech Lockboxes with an essential focus on the cost reduction and speed in which you clear cash and apply it to your working capital .


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