Features of AR Automation

accounts receivable automation

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

Lockboxes have been around for decades and much of the traditional bank lockbox's lifespan has been utilized for capturing payment data associated with payments made by check. Mainstream provided this benefit to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

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

Bank lockboxes are purposefully placed in a central location to reduce mail delivery time, which also assists 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 productivity. The cost of the bank lockbox is typically a monthly cost along with a per line remittance data processing fee. To process a huge number of checks over time can be expensive with a lockbox.

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

 

 

Drawbacks of a Traditional Bank Lockbox



The lockbox can be somewhat costly . Banks commonlyearn a monthly fee in addition to a per line rate related toprocessing payment remittance detail .

Lockboxes may include security concerns . The traditional bank lockbox still takes a decent measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative staff who are a novice to the financial institution or read more an outsourced service provider . The details from the lockbox can provide all crucial components to generate a fraudulent check .

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

Commercial Bank Lockboxes Are Creating a predicament for your Customers' AP Department . Corporations are modernizing their AP Department to remove manual task and deciding to pay their customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are creating an increase in email remittance . FinTech solution businesses have bridged the gap to aidthose organizations in a cost efficient scalable alternative for automating Accounts Receivable .

 

 

Features of a FinTech Lockbox
Reduced Cost


The primary goal of the FinTech Lockbox will be to lowerfees per transaction and provide an Accounts Receivable automation tool 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. Rather than flipping through remittance emails or heading to the vendor portal to download payment data . The AR Lockbox provides you with a single spot for a hold All of your incoming electronic payments meant for swifter cash application .
Eliminates mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee by way of the postal service . With the rise in B2B payments electronically , mail float is rapidly turning into a thingof the past . The increase in electronic payments using FinTech Lockboxes with a major focus on the rate reduction and speed in which you clear cash and apply it to your working capital .


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