Great things about AR Automation

accounts receivable automation

Are you familiar with 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 decades and much of the traditional bank lockbox's life has been used for capturing payment information associated with payments made by check. Big offered this amenity to improve effectiveness and flow of company transactions streamlining the accounts receivables collection process.

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

Bank lockboxes are strategically placed in a central location to reduce mail delivery time, which also helps with lowering the business’ 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 clients A/R workforce and increases their efficiency. The price of the bank lockbox is typically a monthly cost along with a per line remittance data processing cost. To process a large amount of checks over time can be costly with a lockbox.

Today, we see a drastic change with Accounts Payable Departments paying electronically. This shift to ePayments has revolutionized 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 can be rather expensive . Banks typicallyacquire a monthly fee in addition to a per line rate related tohandling payment remittance detail .

Lockboxes may contain security concerns . The standard bank lockbox still requires a fair amount 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 details from the lockbox can provide all crucial get more info elements to create a fraudulent check .

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

Commercial Bank Lockboxes Are Causing a Problem for your Customers' AP Department . Businesses are modernizing their AP Department to eradicate manual task and opting 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 companies have bridged the gap to assistthose organizations in an economical scalable alternative for automating Accounts Receivable .

 

 

Advantages of a FinTech Lockbox
Reduction Cost


The primary objective of the FinTech Lockbox is to decreasecost per transaction and produce an Accounts Receivable automation application to permitcompanies to QUICKLY clear cash and facilitate accounts receivable automation access to your working capital .

Easy payment trail
It is easy to track incoming ePayments in one location. Rather than flipping through remittance emails or heading to the vendor portal to download payment information . The AR Lockbox gives you a single spot for a hold ALL your incoming electronic payments meant for swifter 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 from the postal service accounts receivable automation . With the increase in B2B payments electronically , mail float is rapidly turning into a productof the past . The improvement in electronic payments using FinTech Lockboxes with a significant focus on the cost reduction and speed at which you clear cash and apply it to your working capital .


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