Advantages for Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for many years and a lot of the conventional bank lockbox's life has been used for processing payment information associated with payments made by check. Mainstream provided this service to improve effectiveness and flow of business transactions streamlining the accounts receivables collection method.

Clients generally leverage 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 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 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 huge amount of checks over time can be expensive with a lockbox.

Today, we see a huge shift with Accounts Payable Departments paying electronically. This change to ePayments has elevated 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 often is somewhat costly . Banks normallyearn a monthly rate along with a per line rate connected toprocessing payment remittance detail .

Lockboxes can include security concerns . The traditional bank lockbox still takes a fair measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are a novice to the bank or an outsourced service provider . The information from the lockbox can provide all crucial components to make a fraudulent click here check .

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

Financial Institution Lockboxes Are Causing issues for your Customers' AP Department . Businesses are modernizing their AP Department to eliminate manual task and opting to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are creating an increase in email remittance . FinTech solution companies have bridged the gap to supportthose companies in a cost effective scalable solution for automating Accounts Receivable .

 

 

Benefits of a FinTech Lockbox
Reduced Cost


The primary objective of the FinTech Lockbox would be to lowercost per transaction click here and provide an Accounts Receivable automation tool to helporganizations to rapidly clear cash and facilitate access to your working capital .

Simple payment trail
It is easy to track incoming ePayments in one location. Instead of flipping through remittance emails or heading to the vendor portal to download payment accounts receivable solutions information . The AR Lockbox provides you with one place to hold ALL 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 via the postal service . With the increase in B2B payments electronically , mail float is swiftly becoming a thingof the past . The rise in electronic payments choosing FinTech Lockboxes with a major focus on the price reduction and speed at which you clear cash and apply it to your working capital .


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