Reasons for AR Automation

accounts receivable automation

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

Lockboxes have been around for decades and much of the traditional bank lockbox's lifespan has been utilized for processing payment information associated with payments made by check. Big provided this benefit to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

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 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 customers 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 amount of checks over time can be costly with a lockbox.

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

 

 

Drawbacks of a Traditional Bank Lockbox



The lockbox could be somewhat high priced . Banks typicallyearn 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 requires a decent measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative staff who are new to the bank or an outsourced contractor . The information from the lockbox provides all vital components to here create a fraudulent check .

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

Commercial Bank Lockboxes Are Causing a predicament for your Customers' AP Department . Organizations are modernizing their AP Department to remove manual task and deciding to pay their customers electronically via ACH , Credit Card or vCard . These desired methods of ePayment are creating an increase in email remittance . FinTech solution companies have bridged the gap to helpthose companies in a cost efficient scalable alternative for automating Accounts Receivable .

 

 

Features of a FinTech Lockbox
Reduction Cost


The main objective of the FinTech Lockbox is to decreasefees per transaction and supply an Accounts Receivable automation application to letorganizations to rapidly clear cash and facilitate access to your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments from one location. Instead of flipping through remittance emails or going to the vendor portal to website download payment data . The AR Lockbox provides you with one spot for a hold ALL your incoming electronic payments made for speedier cash application .
Eliminates mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee by means of the postal service . With the increase in B2B payments electronically , mail float is rapidly becoming a thingof the past . The rise in electronic payments choosing FinTech Lockboxes with a major focus on the cost reduction and speed in which you clear cash and apply it to your working capital .


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