Important things about Accounts Receivable Automation

accounts receivable automation

Are you familiar with the advantages 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 conventional bank lockbox's life has been used for capturing payment data associated with payments made by check. Commercial banks offered this service to improve effectiveness and flow of business transactions streamlining the accounts receivables collection method.

Customers basically 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 business’ 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 productivity. The cost of the bank lockbox is typically 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 revolutionized 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 often is fairly expensive . Banks typicallyacquire a monthly rate along with a per line rate connected tohandling payment remittance detail .

Lockboxes may contain security issues . The traditional bank lockbox still requires 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 financial institution or an outsourced service provider . The details from the lockbox can provide all required components to generate a fraudulent check .

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

Financial Institution Lockboxes Are Causing issues for your Customers' AP Department . Businesses are modernizing their AP Department to get rid of website manual process check here and preferring to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are generating an increase in email remittance . FinTech solution businesses have bridged the gap to servethose firms in an economical scalable alternative for automating Accounts Receivable .

 

 

Advantages of a FinTech Lockbox
Reduction Cost


The primary objective of the FinTech Lockbox is to reducepricing per transaction and supply an Accounts Receivable automation tool to alloworganizations to rapidly clear cash and improve use of your working capital .

Easy payment trail
It is easy to track incoming ePayments from one place. Instead of flipping through remittance emails or going to the vendor portal to get payment data . The AR Lockbox gives you one spot for a hold ALL your incoming electronic payments made for faster cash application .
Removes mail float
Mail float is a term for the time required for a check to go from the payer to more info the payee by means of the postal service . With the increase in B2B payments electronically , mail float is rapidly becoming a productof the past . The increase in electronic payments choosing FinTech Lockboxes with an essential focus on the rate reduction and speed at which you clear cash and apply it to your working capital .


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