Advantages for Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for many years and a lot of the traditional bank lockbox's lifespan has been used for processing payment data associated with payments made by check. Mainstream offered this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Clients generally 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 company’s 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 customers A/R workforce and increases their efficiency. The cost of the bank lockbox is typically a monthly cost along with a per line remittance data processing fee. To process a large amount of checks over time can be costly with a lockbox.

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

 

 

Shortcomings of a Traditional Bank Lockbox



The lockbox is usually somewhat costly . Banks typicallyacquire a monthly rate in addition to a per line fee connected withprocessing payment remittance detail .

Lockboxes can contain security concerns . The traditional bank lockbox still takes a fair amount of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are a novice to the bank or an outsourced service provider . The information from the lockbox gives you all vital elements to make 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 enter that data into your ERP to clear the cash .

Commercial Bank Lockboxes Are Causing issues for your Customers' AP Department . Corporations are modernizing their AP Department to eliminate 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 servethose corporations in a cost efficient scalable option for automating Accounts Receivable .

 

 

Rewards of a FinTech Lockbox
Reduced Cost


The major objective of the FinTech Lockbox is to decreasefees per transaction and produce an Accounts Receivable automation program to allowcompanies to QUICKLY clear cash and facilitate use of your working capital .

Easy payment trail
You can easily track incoming ePayments in one place. Rather than flipping through remittance emails click here or heading to the vendor portal to download and read payment data . The AR Lockbox gives you one place to house ALL your incoming electronic payments meant for faster cash application .
Removes mail float
Mail float is a term for the time required for a check to travel from the payer to the payee via the postal service . With the rise in B2B payments electronically , mail float is swiftly becoming a thingof the past . The increase in electronic payments adopting FinTech Lockboxes with an essential focus on the price reduction and speed at which you clear cash and apply it to your working capital .


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