Best things about AR Automation

accounts receivable automation

Do you know the benefits of accounts receivable automation? Conventionally, a bank lockbox has been used by company Accounts Receivable departments to increase expediency.

Lockboxes have been around for a while now and a lot of the traditional bank lockbox's life has been utilized for processing payment information associated with payments made by check. Mainstream offered this service to improve effectiveness and flow of company transactions streamlining the accounts receivables collection process.

Customers generally use the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are strategically placed in a central location to reduce 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 client. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their productivity. The price of the bank lockbox is usually a monthly fee along with a per line remittance data processing cost. To process a large amount of checks over time can be expensive with a lockbox.

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

 

 

Disadvantages of a Traditional Bank Lockbox



The lockbox often is rather high priced . Banks normallyearn a monthly rate as well as a per line rate related tohandling payment remittance detail .

Lockboxes can include security concerns . The standard bank lockbox still requires a decent level of manual re-keying information . more info With the majority of manual data entry attendance being entry level-administrative personnel who are new to the financial institution or an outsourced contractor . The details from the lockbox provides all crucial components to generate a fraudulent check .

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

Standard Bank Lockboxes Are Causing difficulty 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 desired methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to servethose firms in an economical scalable solution for automating Accounts Receivable .

 

 

Pros of a FinTech Lockbox
Reduction Cost


The primary goal of the FinTech Lockbox is to decreasefees per transaction and supply an Accounts Receivable automation tool to allowcompanies to rapidly clear cash and improve access to your working capital .

Trouble-free payment trail
It is easy to track incoming ePayments in one location. Rather than flipping through remittance emails or going to the vendor portal to download and read payment information . The AR Lockbox gives you a single location to hold ALL your incoming electronic payments produced for swifter 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 via the postal service . With the rise in B2B payments electronically , mail float is quickly turning into a thingof the past . The improvement in electronic payments using FinTech Lockboxes with a primary focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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