Attributes of Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the traditional bank lockbox's life has been utilized for processing payment information associated with payments made by check. Commercial banks provided this benefit to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

Clients generally use 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 business’ Days Sales Outstanding (DSO). Banks receive 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 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 costly with a lockbox.

Today, we see a drastic shift with Accounts Payable Departments paying electronically. This change to ePayments has revolutionized the FinTech business 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 expensive . Banks commonlyearn a monthly fee along with a per line fee linked toprocessing payment remittance detail .

Lockboxes can include security concerns . The traditional bank lockbox still takes a fair amount of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative workers who are new to the bank or an outsourced service provider . The information from the lockbox gives you all required elements to create a fraudulent check .

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

Commercial Bank Lockboxes Are Creating problems for your Customers' AP Department . Businesses are modernizing their AP Department to get rid of manual process and opting to pay their clients electronically via ACH , Credit Card or vCard . click here These desired methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to supportthose businesses in a cost efficient scalable solution for automating Accounts Receivable .

 

 

Benefits of a FinTech Lockbox
Reduced Cost


The primary objective of the FinTech Lockbox will be to reducefees per transaction and produce an Accounts Receivable automation program to alloworganizations to QUICKLY clear cash and facilitate access to your working capital .

Trouble-free payment trail
You can easily track incoming ePayments in one place. Rather than flipping through remittance emails or heading to the vendor portal to download payment data . The AR Lockbox provides you with a single place to hold All of your incoming electronic payments made for faster 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 rise in B2B payments electronically , mail float is swiftly becoming a productof the past . The improvement in electronic payments choosing FinTech Lockboxes with an essential focus on the cost reduction and speed in which you clear cash and apply it to your working capital .


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