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 a while now and a lot of the traditional bank lockbox's lifespan has been utilized for capturing payment data associated with payments made by check. Commercial banks offered this benefit to improve effectiveness and flow of company transactions streamlining the accounts receivables collection process.

Clients generally 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 customer. 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 usually a monthly cost along with a per line remittance data processing cost. To process a huge number of checks over time can be expensive with a lockbox.

Today, we see a huge change with Accounts Payable Departments paying electronically. This change to ePayments has elevated 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 could be fairly costly . Banks typicallyearn a monthly fee as well as a per line fee connected toprocessing payment remittance detail .

Lockboxes can include 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 financial institution or an outsourced service provider . The details from the lockbox gives you all needed components to make a fraudulent check .

Lockboxes don’t tie into your accounting system . Bank lockboxes process the payments and remittance information thensend you the information . Your organization still must input that information into your ERP to clear the cash .

Commercial Bank Lockboxes Are Creating a Problem here for your Customers' AP Department . Companies are modernizing their AP Department to get rid of manual task and deciding 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 businesses have bridged the gap to aidthose organizations in an economical scalable solution for automating Accounts Receivable .

 

 

Rewards of a FinTech Lockbox
Reduced Cost


The main objective of the FinTech Lockbox is to lowercost per transaction and provide an Accounts Receivable automation tool to permitbusinesses to QUICKLY clear cash and facilitate use of your working capital .

Simple payment trail
It is simple to track incoming ePayments from one place. Instead of flipping through remittance emails or heading to the vendor portal to get payment information . The AR Lockbox gives you a single place to hold All of your incoming electronic payments meant for faster 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 quickly turning into a thingof the past . The increasing amount of electronic payments choosing 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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