Attributes of Accounts Receivable Automation

accounts receivable automation

Do you know the advantages of accounts receivable automation? Conventionally, a bank lockbox has been used by organization Accounts Receivable departments to increase efficiency.

Lockboxes have been around for a while now and a lot of the traditional bank lockbox's life has been used for capturing payment data associated with payments made by check. Mainstream provided this amenity to improve effectiveness and flow of business 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 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 customer. Because banks are processing checks and remittance this decreases the clients A/R workforce and increases their efficiency. The cost of the bank lockbox is usually a monthly cost along with a per line remittance data processing cost. To process a large amount of checks over time can be pricey with a lockbox.

Today, we see a huge change with Accounts Payable Departments paying electronically. This change to ePayments has elevated the FinTech business with {solutions| designed with the goal of decreasing business costs of processing incoming payments.

 

 

Drawbacks of a Traditional Bank Lockbox



The lockbox could be somewhat expensive . Banks normallyacquire a monthly fee along with a per line fee connected toprocessing payment remittance detail .

Lockboxes may contain security issues . The traditional bank lockbox still requires a decent measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative staff who are new to the bank or an outsourced service provider . The information from the lockbox gives you all necessary components to make a fraudulent check .

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

Commercial Bank Lockboxes Are Causing problems for your Customers' AP Department . Corporations are modernizing their AP Department to eliminate manual task and preferring to pay their customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to helpthose organizations in a cost effective scalable option for automating check here Accounts Receivable .

 

 

Rewards of a FinTech Lockbox
Reduction Cost


The main goal of the FinTech Lockbox will be to decreasecost per transaction and supply an Accounts Receivable automation program to permitorganizations to QUICKLY clear cash and improve use of your working capital .

Easy payment trail
It is simple to track incoming ePayments from one place. Instead of flipping through remittance emails or heading to the vendor portal to download payment information . The AR Lockbox provides you with one destination to house ALL your incoming electronic payments produced for quicker cash application .
Removes mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee by means of the postal service . With the rise in B2B payments electronically , mail float is swiftly turning into a thingof the past . The rise in electronic payments embracing 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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