Aspects of AR 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 processing payment information associated with payments made by check. Commercial banks offered this amenity to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

Clients basically leverage the bank lockbox to receive check payments in one consistent location.

Bank lockboxes are purposefully placed in a central location to decrease mail delivery time, which also helps with lowering the company’s Days Sales Outstanding (DSO). Banks receive 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 clients A/R workforce and increases their efficiency. The cost 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 costly with a lockbox.

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

 

 

Pitfalls of a Traditional Bank Lockbox



The lockbox is usually rather high priced . Banks normallyacquire a monthly rate in addition to a per line fee linked tohandling payment remittance detail .

Lockboxes may contain security concerns . The standard bank lockbox still takes a fair amount of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative staff who are a novice to the bank or an outsourced contractor . The data from the lockbox can provide all essential elements read more to produce a fraudulent check .

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

Standard Bank Lockboxes Are Causing a predicament for your Customers' AP Department . Businesses are modernizing their AP Department to eliminate manual task and preferring to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to helpthose businesses in an economical scalable alternative for automating Accounts Receivable .

 

 

Rewards of a FinTech Lockbox
Reduced Cost


The primary objective of the FinTech Lockbox is to decreasecost per transaction and supply an Accounts Receivable automation tool to allowbusinesses to QUICKLY clear cash and facilitate access to your working capital .

Trouble-free 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 and read payment data . The AR Lockbox provides you with a single location to hold All of your incoming electronic payments made for speedier cash application .
Eliminates mail float
Mail float is a term for the time required for a check to go from the payer to the payee through the postal service . With the increase in B2B payments electronically , mail float is rapidly turning into a thingof the past . The rise in electronic payments embracing FinTech Lockboxes with a primary focus on the price reduction and speed at which you clear cash and apply it to your working capital .


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