Best thing about Accounts Receivable 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 many years and a lot of the conventional bank lockbox's lifespan has been utilized for capturing payment data associated with payments made by check. Big offered this amenity to improve effectiveness and flow of business transactions streamlining the accounts receivables collection method.

Clients basically leverage the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are purposefully placed in a central location to decrease 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 customers A/R workforce and increases their efficiency. The price of the bank lockbox is usually a monthly fee along with a per line remittance data processing fee. To process a huge number of checks over time can be pricey with a lockbox.

Today, we see a huge change with Accounts Payable Departments paying electronically. This shift to ePayments has elevated the FinTech trade with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

 

 

Downsides of a Traditional Bank Lockbox



The lockbox is often rather costly . Banks usuallyacquire a monthly fee along with a per line rate connected toprocessing website payment remittance detail .

Lockboxes can include security concerns . The traditional bank lockbox still requires a fair level 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 contractor . The data from the lockbox gives you all vital elements to generate a fraudulent check .

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

Standard Bank Lockboxes Are Causing issues for your Customers' AP Department . Organizations are modernizing their AP Department to eradicate manual process and deciding 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 companies have bridged the gap to servethose companies in a cost efficient scalable option for automating Accounts Receivable .

 

 

Benefits of a FinTech Lockbox
Reduction Cost


The main goal of the FinTech Lockbox would be to decreasecost per transaction and provide an Accounts Receivable automation application to letbusinesses to rapidly clear cash and improve access to your working capital .

Simple payment trail
It is simple to track incoming ePayments from one place. Rather than flipping through remittance emails or heading to the vendor portal to download and read payment information . The AR Lockbox provides you with one destination to house ALL your incoming electronic payments made for quicker 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 from the postal service . With the rise in B2B payments electronically , mail float is quickly turning into a productof the past . The improvement in electronic payments adopting FinTech Lockboxes with a significant focus on the fee reduction and speed at which you clear cash and apply it to your working capital .


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