Features of AR Automation

accounts receivable automation

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

Lockboxes have been around for decades and a lot of the conventional bank lockbox's life has been used for processing payment data associated with payments made by check. Commercial banks offered this service to improve effectiveness and flow of business transactions simplifying the accounts receivables collection method.

Customers generally leverage 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 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 client. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their efficiency. The cost of the bank lockbox is usually a monthly cost along with a per line remittance data processing cost. To process a large number of checks over time can be expensive with a lockbox.

Today, we see a drastic change with Accounts Payable Departments paying electronically. This shift to ePayments has revolutionized 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 could be relatively high priced . Banks usuallyearn a monthly fee as well as a per line rate connected tohandling payment remittance detail .

Lockboxes can contain security issues . The standard bank lockbox still takes a fair level of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative personnel who are a novice to the bank or an outsourced service provider . The information from the lockbox gives you all vital elements to generate a fraudulent check .

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

Commercial Bank Lockboxes Are Creating a predicament for your Customers' AP Department . Corporations are modernizing their AP Department to eliminate manual process and opting to pay their clients 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 supportthose companies in an economical scalable solution for automating Accounts Receivable .

Rewards of a FinTech Lockbox
Reduction Cost


The primary objective of the FinTech Lockbox would be to reducecost per transaction and produce an Accounts Receivable automation application to permitcompanies to QUICKLY clear cash and facilitate access to your working capital .

Easy payment trail
It is easy to track incoming ePayments in one location. Rather than flipping through remittance emails or heading to the vendor portal to download and read payment information . The AR Lockbox gives you one spot for a hold All of your incoming electronic payments produced for swifter cash application .
Removes 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 thingof the past . The improvement in electronic payments using FinTech Lockboxes with a major focus on the fee reduction and speed at which you clear cash and apply it to your working capital .


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