Aspects of Accounts Receivable Automation

accounts receivable automation

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

Lockboxes have been around for decades and much of the traditional bank lockbox's lifespan has been used for capturing payment information associated with payments made by check. Commercial banks provided this service to improve effectiveness and flow of business transactions streamlining the accounts receivables collection process.

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

Bank lockboxes are strategically placed in a central location to decrease 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 productivity. The cost of the bank lockbox is typically a monthly fee along with a per line remittance data processing fee. To process a large number of checks over time can be costly with a lockbox.

Today, we see a drastic shift 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.

 

 

Shortcomings of a Traditional Bank Lockbox



The lockbox is usually fairly costly . Banks normallyearn a monthly rate along with a per line fee associated withprocessing payment remittance detail .

Lockboxes may include security concerns . The traditional bank lockbox still get more info requires a fair level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative personnel who are a novice to the bank or an outsourced contractor . The details from the lockbox can provide all crucial elements to make a fraudulent check .

Lockboxes don’t connect into your accounting program . Bank lockboxes process the payments and remittance information and thenforward you the information . Your personnel still must enter 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 remove manual task and deciding to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are producing an increase in email remittance . FinTech solution businesses have bridged the gap to assistthose corporations in a cost efficient scalable option for automating Accounts Receivable .

 

 

Benefits of a FinTech Lockbox
Reduction Cost


The major goal of the FinTech Lockbox is to lowercost per transaction and supply an Accounts Receivable automation tool to helpbusinesses to rapidly clear cash and improve use of your working capital .

Trouble-free payment trail
You can easily track incoming ePayments in one location. Instead of flipping through remittance emails or going to the vendor portal to get payment information . The AR Lockbox provides you with one destination to hold All of your incoming electronic payments created for swifter cash application .
Gets rid of mail float
Mail float is a term for the time required for a check to travel from the payer to the payee by way of the postal service . With the increase in B2B payments electronically , mail float is quickly becoming a productof the read more past . The increase website in electronic payments using FinTech Lockboxes with a major focus on the rate reduction and speed at which you clear cash and apply it to your working capital .


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