Attributes of Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for decades and much of the traditional bank lockbox's lifespan has been used for capturing payment information associated with payments made by check. Mainstream offered this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection method.

Customers generally 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 assists 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 clients A/R workforce and increases their productivity. The price of the bank lockbox is usually a monthly cost along with a per line remittance data processing fee. To process a huge amount of checks over time can be costly with a lockbox.

Today, we see a huge 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 is often somewhat high priced . Banks typicallyearn a monthly fee along with a per line fee connected tohandling payment remittance detail .

Lockboxes may include security concerns . The standard bank lockbox still takes a decent website amount 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 contractor . The information from the lockbox gives you all required components to produce a fraudulent check .

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

Commercial Bank Lockboxes Are Creating a Problem for your Customers' AP Department . Organizations are modernizing their AP Department to eliminate manual task and preferring to pay their clients 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 helpthose companies in a cost effective scalable option for automating Accounts Receivable .

 

 

Advantages of a FinTech Lockbox
Reduction Cost


The major goal of the FinTech Lockbox is to reducepricing per transaction and supply an Accounts Receivable automation tool to helpbusinesses to QUICKLY clear cash and improve access to your working capital .

Simple payment trail
You can easily 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 spot for a hold All of your incoming electronic payments created for swifter cash application .
Eliminates 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 increase in B2B payments electronically , mail float is swiftly becoming a thingof the past . The improvement in electronic payments using FinTech Lockboxes with a significant focus on the fee reduction and speed in which you here clear cash and apply it to your working capital .


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