Benefits from Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the traditional bank lockbox's lifespan has been utilized for capturing payment information associated with payments made by check. Big provided this amenity to improve effectiveness and flow of business transactions streamlining the accounts receivables collection process.

Clients generally use the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are strategically placed in a central location to decrease mail delivery time, which also helps with lowering the business’ Days Sales Outstanding (DSO). Banks receive the paper check, process it along with the remittance data and send the data back to their client. 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 typically a monthly cost along with a per line remittance data processing fee. To process a large number of checks over time can be costly with a lockbox.

Today, we see a huge change with Accounts Payable Departments paying electronically. This change to ePayments has elevated the FinTech business 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 high priced . Banks commonlyearn a monthly rate in addition to a per line fee linked tohandling payment remittance detail .

Lockboxes may include security issues . The standard bank lockbox still requires a decent level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative personnel who are new to the bank or an outsourced contractor . The information from the lockbox provides all required elements to produce a fraudulent check .

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

Commercial Bank Lockboxes Are Creating difficulty for your Customers' AP Department . Organizations are modernizing their AP Department to eradicate manual process and preferring to pay their click here clients electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are generating an increase in email remittance . FinTech solution companies have bridged the gap to servethose companies in an economical scalable option for automating Accounts Receivable .

 

 

Features of a FinTech Lockbox
Reduced Cost


The major goal of the FinTech Lockbox is usually to reducepricing per transaction and provide an Accounts Receivable automation program to permitbusinesses to QUICKLY clear cash and facilitate access to your working capital .

Trouble-free payment trail
You can easily track incoming ePayments in one place. Instead of flipping through remittance emails or heading to the vendor portal to download and read payment information . The AR Lockbox provides you with a single destination to hold All of your incoming electronic payments meant for speedier cash application .
Gets rid of mail float
Mail float is a term for the time required for a check to travel from the payer to the payee accounts receivable automation from the postal service . With the increase in B2B payments electronically , mail float is quickly turning into a thingof the past . The increase in electronic payments using FinTech Lockboxes with a primary focus on the cost reduction and speed in which you clear cash and apply it to your working capital .


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