Important things about AR Automation

accounts receivable automation

Are you aware of the benefits 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 much of the conventional bank lockbox's lifespan has been utilized for capturing payment data associated with payments made by check. Mainstream offered this amenity to improve effectiveness and flow of company transactions streamlining 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 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 price of the bank lockbox is usually a monthly fee along with a per line remittance data processing cost. To process a huge amount of checks over time can be costly with a lockbox.

Today, we see a huge change 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.

 

 

Weaknesses of a Traditional Bank Lockbox



The lockbox is often rather high priced . Banks commonlyearn a monthly rate in addition to a per line fee linked toprocessing payment remittance detail .

Lockboxes can include security issues . The traditional bank lockbox still requires a fair level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative staff who are new to the financial institution or an outsourced service provider . The information from the lockbox gives you all vital elements to create a fraudulent check .

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

Standard Bank Lockboxes Are Creating difficulty for your Customers' AP Department . Corporations are modernizing their check here AP Department to remove manual task and preferring to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are creating an increase in email remittance . FinTech solution companies have bridged the gap to assistthose companies in a cost efficient scalable option for automating Accounts Receivable .

 

 

Pros of a FinTech Lockbox
Reduced Cost


The major objective of the FinTech Lockbox will be to lowerpricing per transaction and supply an Accounts Receivable automation application to letcompanies to QUICKLY clear cash and improve access to your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments in one location. Rather than flipping through remittance emails or heading to the vendor portal to get payment data . The AR Lockbox provides you with one place to house ALL your incoming electronic payments made for faster cash application .
Gets rid of mail float
Mail get more info float is a term for the time required for a check to go from the payer to the payee by way of the postal service . With the rise in B2B payments electronically , mail float is quickly turning into a thingof the past . The improvement in electronic payments using FinTech Lockboxes with a significant focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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