Advantages for Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for decades and much of the traditional bank lockbox's lifespan has been utilized for capturing payment information associated with payments made by check. Mainstream provided this amenity to improve effectiveness and flow of company transactions simplifying 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 assists with lowering the business’ Days Sales Outstanding (DSO). Banks receive 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 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 big change with Accounts Payable Departments paying electronically. This change to ePayments has elevated the FinTech industry with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

 

 

Drawbacks of a Traditional Bank Lockbox



The lockbox is usually relatively expensive . Banks normallyacquire a monthly fee along with a per line rate related toprocessing payment remittance detail .

Lockboxes can contain security concerns . The traditional bank lockbox still requires a fair amount of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative workers who are new to the bank or an outsourced contractor . The information from the lockbox provides all vital components to produce a fraudulent check .

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

Commercial Bank Lockboxes Are Creating a Problem for your Customers' AP Department . Corporations 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 have bridged the gap to assistthose businesses in a cost effective scalable option for automating Accounts Receivable .

 

 

Advantages of a FinTech Lockbox
Reduction Cost


The major goal of the FinTech Lockbox is to decreasecost per transaction and supply an Accounts Receivable automation tool to letcompanies to rapidly clear cash and improve access to your working capital .

Trouble-free 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 payment data . The AR Lockbox provides read more you with one destination to hold ALL your incoming electronic payments produced for quicker cash application .
Removes mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee by way of the postal service . With the rise in B2B payments electronically , mail float is quickly becoming a thingof the past . The improvement in electronic payments using FinTech Lockboxes with a major focus on the rate reduction and speed at which you clear cash and apply it to your working capital .


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