Streamlining Payment Posting with the Help of a Lockbox
When a company’s customer base is growing by leaps and bounds and its ERP system is highly complex, posting invoice payments can be a time-consuming process for Accounts Receivable. This was the situation at AirHydro Power, a provider of hydraulic, pneumatic, connector, and automation technologies headquartered in Kentucky that serves customers in that state as well as West Virginia, Southern Indiana, and Alabama.
AirHydro’s AR team is comprised of two people who are responsible for all Accounts Receivable and Customer Collections responsibilities, explains CFO Geoff Luber. The company has more than 4,200 active customers over the last 12 months and has been experiencing steady, rapid growth. “Since 2012, our average growth rate has been in excess of 10 percent per year. Our customer base has increased in excess of 35 percent,” Luber notes.
While continuous double-digit growth is great for business, it was putting a burden on the AR team, which was trying to keep up with the volume of payment processing required. While the company is receiving more payments via ACH, the lion’s share of customer payments still come in via check—AR processes approximately 2,500 check payments per month.
“All the payments were ...