Advantages of AR Automation

accounts receivable automation

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

Lockboxes have been around for a while now and much of the conventional bank lockbox's life has been used for capturing payment information associated with payments made by check. Commercial banks provided this amenity to improve effectiveness and flow of business transactions simplifying the accounts receivables collection method.

Clients generally leverage 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 client. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their productivity. The cost of the bank lockbox is usually a monthly cost along with a per line remittance data processing cost. To process a large number 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 elevated the FinTech business with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

 

 

Pitfalls of a Traditional Bank Lockbox



The lockbox can be fairly expensive . Banks typicallyearn a monthly fee in addition to a per line rate connected tohandling payment remittance detail .

Lockboxes may include security concerns . The traditional click here bank lockbox still website requires a fair level of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative personnel who are a novice to the financial institution or an outsourced service provider . The data from the lockbox gives you all crucial components to make a fraudulent check .

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

Commercial Bank Lockboxes Are Causing difficulty for your Customers' AP Department . Corporations are modernizing their AP Department to eliminate manual task and deciding to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to helpthose organizations in an economical website scalable alternative for automating Accounts Receivable .

 

 

Advantages of a FinTech Lockbox
Reduced Cost


The major goal of the FinTech Lockbox is usually to lowercost per transaction and supply an Accounts Receivable automation program to allowbusinesses to rapidly clear cash and improve access to your working capital .

Easy payment trail
You can easily track incoming ePayments in one location. Rather than flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox provides you with a single location to house ALL your incoming electronic payments created for speedier cash application .
Gets rid of mail float
Mail float is a term for the time needed for a check to go from the payer to the payee from the postal service . With the increase in B2B payments electronically , mail float is rapidly turning into a productof the past . The improvement in electronic payments embracing FinTech Lockboxes with a primary focus on the cost reduction and speed in which you clear cash and apply it to your working capital .


1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Comments on “Advantages of AR Automation”

Leave a Reply

Gravatar