Features of Accounts Receivable Automation

accounts receivable automation

Are you familiar with the benefits of accounts receivable automation? Traditionally, a bank lockbox has been used by business Accounts Receivable departments to increase expediency.

Lockboxes have been around for many years and much of the conventional bank lockbox's lifespan has been used for capturing payment data associated with payments made by check. Mainstream offered this benefit to improve effectiveness and flow of company transactions streamlining the accounts receivables collection method.

Clients 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 receive 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 clients 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 fee. To process a huge number of checks over time can be costly with a lockbox.

Today, we see a big 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.

 

 

Downsides of a Traditional Bank Lockbox



The lockbox often is fairly high priced . Banks commonlyacquire a monthly fee along with a per line rate connected toprocessing payment remittance detail .

Lockboxes can include security concerns . The traditional bank lockbox still takes a fair amount of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are a get more info novice to the financial institution or an outsourced contractor . The information from the lockbox can provide all essential components to create a fraudulent check .

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

Financial Institution Lockboxes Are Creating a predicament for your Customers' AP Department . Corporations are modernizing their AP Department to eliminate manual task and preferring to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are producing an more info increase in email remittance . FinTech solution businesses have bridged the gap to aidthose companies in an economical scalable solution for automating Accounts Receivable .

 

 

Pros of a FinTech Lockbox
Reduction Cost


The main objective of the FinTech Lockbox is to decreasepricing per transaction and provide an Accounts Receivable automation application to helpbusinesses to QUICKLY clear cash and facilitate use of your working capital .

Simple payment trail
It is easy to track incoming ePayments from one place. Rather than flipping through remittance emails or going to the vendor portal to get payment information . The AR Lockbox provides you with a single place to house ALL your incoming electronic payments produced for swifter cash application .
Eliminates mail float
Mail float is a term for the time required for a check to travel from the payer to the payee from the postal service . With the rise in B2B payments electronically , mail float is quickly turning into website a thingof the past . The increase in electronic payments using FinTech Lockboxes with a major focus on the fee reduction and speed in which you clear cash and apply it to your working capital .


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