Attributes of Accounts Receivable Automation

accounts receivable automation

Are you aware of the benefits 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 a lot of the traditional bank lockbox's lifespan has been used for capturing payment information associated with payments made by check. Mainstream provided this amenity to improve effectiveness and flow of business transactions streamlining the accounts receivables collection process.

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 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 data back to their customer. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their productivity. The cost of the bank lockbox is typically a monthly fee along with a per line remittance data processing fee. To process a large amount of checks over time can be expensive with a lockbox.

Today, we see a big change 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.

 

 

Shortcomings of a Traditional Bank Lockbox



The lockbox could be somewhat high priced . Banks generallyearn a monthly rate in addition to a per line fee connected withhandling payment remittance detail .

Lockboxes can include security issues . The standard bank lockbox still takes a decent measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative staff who are a novice to the financial institution or an outsourced service provider . The details from the lockbox can provide all vital components to create a fraudulent check .

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

Commercial Bank Lockboxes Are Creating a predicament for your Customers' AP Department . Organizations are modernizing their AP Department to get rid of manual task more info and opting 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 assistthose businesses in a cost efficient scalable solution for automating Accounts Receivable .

 

 

Pros of a FinTech Lockbox
Reduction Cost


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

Trouble-free payment trail
You can easily track incoming ePayments in one location. Rather than flipping through remittance emails or going to the vendor portal to get payment information . The AR Lockbox provides you with a single place to hold All of your incoming electronic payments meant 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 via the postal service . With the rise in B2B payments electronically , mail float is rapidly becoming a productof the past . The improvement in electronic payments adopting FinTech Lockboxes with an essential focus on the price reduction and speed at which you clear cash and apply it to your working capital .


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