Best thing 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 decades and a lot of the traditional bank lockbox's life has been used for capturing payment information associated with payments made by check. Mainstream provided this amenity to improve effectiveness and flow of company transactions simplifying 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 helps 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 customers A/R workforce and increases their efficiency. The cost of the bank lockbox is typically a monthly cost along with a per line remittance data processing cost. To process a large amount of checks over time can be costly with a lockbox.

Today, we see a huge shift 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.

 

 

Weaknesses of a Traditional Bank Lockbox



The lockbox is often rather costly . Banks usuallyacquire a monthly rate as well as a per line rate connected tohandling payment remittance detail .

Lockboxes can contain security issues . The standard bank lockbox still requires a fair measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative workers who are new to the financial institution or an outsourced service provider . The details from the lockbox provides all necessary components to produce a fraudulent check .

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

Financial Institution Lockboxes Are Causing a predicament for your Customers' AP Department . Organizations are modernizing their AP Department to get rid of manual task and opting to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are generating an increase in email remittance . FinTech solution companies have bridged the gap to assistthose corporations in a cost efficient scalable solution for automating Accounts Receivable .

 

 

Advantages of a FinTech Lockbox
Reduction Cost


The major goal of the FinTech Lockbox will be to lowerpricing per transaction and produce an Accounts Receivable automation application to helpbusinesses to rapidly clear cash and improve access to your working capital .

Trouble-free payment trail
You can easily track incoming ePayments from one location. Rather than flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox gives you a single place to house ALL your incoming electronic payments meant for quicker cash application .
Gets rid of 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 rise in B2B payments electronically , mail float is quickly becoming a thingof the past . The increasing amount of electronic payments using FinTech Lockboxes with a major focus on the rate reduction and speed at which you clear cash and apply it to your more info working capital .


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