Best things about Accounts Receivable Automation

accounts receivable automation

Are you aware of the benefits of accounts receivable automation? Conventionally, a bank lockbox has been used by organization Accounts Receivable departments to increase expediency.

Lockboxes have been around for a while now and much of the traditional bank lockbox's lifespan has been used for processing payment data associated with payments made by check. Big offered this benefit to improve effectiveness and flow of business transactions streamlining the accounts receivables collection method.

Customers 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 data back to their customer. Because banks are processing checks and remittance this decreases the customers 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 cost. To process a large number of checks over time can be expensive with a lockbox.

Today, we see a huge shift 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 is often fairly expensive . Banks generallyacquire a monthly rate along with a per line rate linked tohandling payment remittance detail .

Lockboxes may contain security concerns . The traditional bank lockbox still takes a fair level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative staff who are a novice to the financial institution or an outsourced contractor . The details from the lockbox can provide all necessary elements to produce a fraudulent check .

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

Commercial Bank Lockboxes Are Creating issues for your Customers' AP Department . Businesses are modernizing their AP Department to eliminate manual task and opting to pay their customers electronically via ACH , Credit Card or vCard . These popular methods of ePayment are producing an increase in email remittance . FinTech solution companies here have bridged the gap to helpthose organizations in a cost efficient scalable alternative for automating Accounts Receivable .

 

 

Features of a FinTech Lockbox
Reduced Cost


The main objective of the FinTech Lockbox is usually to lowercost per transaction and provide an Accounts Receivable automation program to alloworganizations to rapidly clear cash and facilitate use of your working capital .

Trouble-free payment trail
You can easily track incoming ePayments from one place. Rather than flipping through remittance emails or heading to the vendor portal to download payment information . The AR Lockbox provides you with one destination to house All of your incoming electronic payments created for quicker cash application .
Gets rid of mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee from the postal service . With the rise in B2B payments electronically , mail float is rapidly becoming a thingof the past . The rise in electronic payments using FinTech Lockboxes with an essential focus on the fee reduction and speed at which you clear cash and apply it to your working capital .


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