Best things about Accounts Receivable Automation

accounts receivable automation

Do you know the advantages of accounts receivable automation? Traditionally, a bank lockbox has been used by business 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 used for processing payment information associated with payments made by check. Mainstream offered this amenity to improve effectiveness and flow of company transactions streamlining the accounts receivables collection method.

Clients basically use 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 assists 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 clients A/R workforce and increases their productivity. The cost of the bank lockbox is usually a monthly cost along with a per line remittance data processing fee. To process a huge amount of checks over time can be costly with a lockbox.

Today, we see a drastic 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.

 

 

Disadvantages of a Traditional Bank Lockbox



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

Lockboxes can contain security concerns . The traditional bank lockbox still takes a decent level of manual re-keying data . With the majority of manual data entry attendance being more info entry level-administrative staff who are a novice to the financial institution or an outsourced service provider . The details from the lockbox gives you all crucial elements to generate a fraudulent check .

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

Financial Institution Lockboxes Are Creating problems for your Customers' AP Department . Businesses 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 businesses have bridged the gap to servethose firms in a cost efficient scalable solution for automating Accounts Receivable .

 

 

Benefits of a FinTech Lockbox
Reduced Cost


The primary objective of the FinTech Lockbox would be to lowerfees per transaction and produce an Accounts Receivable automation application to alloworganizations to QUICKLY clear cash and facilitate use of your working capital .

Simple payment trail
It is easy to track incoming ePayments in one location. Instead of flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox gives you a single place to house All of your incoming electronic payments made for speedier 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 through the postal service . With the increase in B2B payments electronically , mail float is rapidly turning into a productof the past . The rise in electronic payments choosing FinTech Lockboxes with an essential focus on the fee reduction and speed in which you clear cash and apply it to your working capital .


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