Attributes of AR Automation

accounts receivable automation

Are you familiar with 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 used for capturing payment information associated with payments made by check. Big provided this benefit to improve effectiveness and flow of business transactions simplifying the accounts receivables collection method.

Clients 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 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 price of the bank lockbox is typically 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 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.

 

 

Shortcomings of a Traditional Bank Lockbox



The lockbox often is somewhat expensive . Banks commonlyearn a monthly fee along with a per line rate linked tohandling payment remittance detail .

Lockboxes can contain security concerns . The traditional bank lockbox still takes a decent amount of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative staff who are new to the financial institution or an outsourced service provider . The details from the lockbox can provide all vital components to generate a fraudulent check .

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

Traditional Bank Lockboxes Are Causing difficulty for your Customers' AP Department . Businesses are modernizing their AP Department to eliminate manual task and preferring to pay their customers electronically via ACH , Credit Card or vCard accounts receivable solutions . These popular methods of ePayment are generating an increase in email remittance . FinTech solution businesses have bridged the gap to servethose organizations in a cost effective scalable option for automating Accounts Receivable .

 

 

Rewards of a FinTech Lockbox
Reduced Cost


The major objective of the FinTech Lockbox is usually to lowercost per transaction and provide an Accounts Receivable automation program to helpcompanies to QUICKLY clear cash and improve use of your working capital .

Easy payment trail
It is easy to track incoming ePayments from one location. Rather than flipping through remittance emails or heading to the vendor portal to download payment data . The AR Lockbox provides you with one destination to house All of your incoming electronic payments produced for swifter 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 rise in B2B payments electronically , mail float is rapidly becoming a thingof the past . The improvement in electronic payments choosing FinTech Lockboxes with a major focus on the cost reduction and speed at which you clear cash and apply it to your working capital .


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