Advantages of Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for decades and much of the conventional bank lockbox's lifespan has been used for processing payment information associated with payments made by check. Commercial banks 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 purposefully 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 number 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 trade with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

 

 

Pitfalls of a Traditional Bank Lockbox



The lockbox often is relatively expensive . Banks generallyearn a monthly rate in addition to a per line fee connected withhandling payment remittance detail .

Lockboxes can contain security issues . The traditional bank lockbox still requires a decent amount of manual re-keying data . With the majority of manual data entry more info attendance being entry level-administrative workers who are a novice to the bank or an outsourced contractor . The data from the lockbox provides all crucial components to make a fraudulent check .

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

Standard Bank Lockboxes Are Causing a predicament for your Customers' AP Department . Companies are modernizing their AP Department to get rid of manual process and preferring to pay their customers 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 organizations in a cost effective scalable solution for automating read more Accounts Receivable .

 

 

Advantages of a FinTech Lockbox
Reduced Cost


The click here major goal of the FinTech Lockbox is to reducepricing per transaction and supply an Accounts Receivable automation program to permitbusinesses to QUICKLY clear cash and facilitate use of your working capital .

Trouble-free payment trail
You can easily track incoming ePayments in one location. Instead of flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox provides you with a single destination to hold ALL your incoming electronic payments produced for quicker 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 from the postal service . With the rise in B2B payments electronically , mail float is quickly becoming a thingof the past . The increase in electronic payments adopting FinTech Lockboxes with a significant focus on the fee reduction and speed in which you clear cash and apply it to your working capital .


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