Best things about Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for a while now and a lot of the traditional bank lockbox's life has been utilized for capturing payment information associated with payments made by check. Mainstream provided this amenity to improve effectiveness and flow of business transactions simplifying 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 assists with lowering the company’s Days Sales Outstanding (DSO). Banks get 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 efficiency. The price of the bank lockbox is usually a monthly cost along with a per line remittance data processing fee. To process a huge number of checks over time can be pricey with a lockbox.

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

 

 

Disadvantages of a Traditional Bank Lockbox



The lockbox could be relatively costly . Banks usuallyearn a monthly rate along with a per line fee related toprocessing payment remittance detail .

Lockboxes may include security concerns . The traditional bank lockbox still takes a decent amount of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative workers who are a novice to the bank or an outsourced contractor . The information from the lockbox can provide all necessary elements to make a fraudulent check .

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

Financial Institution Lockboxes Are Causing problems for your Customers' AP Department . Organizations are modernizing their AP Department to remove manual process and deciding to pay their customers electronically via ACH , Credit Card or vCard . These popular methods of ePayment are producing an increase in email remittance . FinTech solution businesses have bridged the gap to servethose organizations in a cost effective scalable option for automating Accounts Receivable .

 

 

Advantages of a FinTech Lockbox
Reduction Cost


The main goal of the FinTech Lockbox is usually to reducefees per transaction and produce an Accounts Receivable automation tool to letorganizations to QUICKLY clear cash and facilitate access to your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments from one place. Instead of flipping through remittance emails or heading to the vendor portal to download payment data . The AR Lockbox provides you with one place to house ALL 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 by way of the postal service . With the rise in B2B payments electronically , mail float is quickly becoming a productof the past . The increasing amount of electronic payments embracing FinTech Lockboxes with a significant focus on the cost reduction and speed in which you clear cash website and apply it to your working capital .


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