Attributes of AR Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the conventional bank lockbox's lifespan has been used for capturing payment data associated with payments made by check. Big offered this benefit 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 get 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 customers 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 pricey with a lockbox.

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

 

 

Shortcomings of a Traditional Bank Lockbox



The lockbox could be fairly expensive . Banks commonlyearn a monthly rate in addition to a per line fee connected withhandling payment remittance detail .

Lockboxes can contain security concerns . The traditional bank lockbox still takes a decent amount of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative workers who are a novice to the financial institution or an outsourced contractor . The data from the lockbox provides all essential elements to create a fraudulent check .

Lockboxes don’t tie into your accounting program . Bank lockboxes process the payments and remittance data and thenforward you the information . Your personnel 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 eradicate manual task and opting to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are producing an increase in email remittance . FinTech solution businesses have bridged the gap to aidthose companies in an economical scalable solution for automating Accounts Receivable .

 

 

Rewards of a FinTech Lockbox
Reduction Cost


The main objective of the FinTech Lockbox is usually to lowerpricing per transaction and produce an Accounts Receivable automation application to letorganizations to QUICKLY clear cash and facilitate use of your working capital .

Simple payment trail
It is simple to track incoming ePayments in one place. Instead of flipping through remittance emails or heading to the vendor portal to download and read payment information . The AR Lockbox provides you with a single destination to house ALL your incoming electronic payments created for swifter cash application .
Eliminates mail float
Mail float is a term for the time required for a check to travel from the payer to ar lockbox the payee by means of the postal service . With the increase in B2B payments electronically , mail float is quickly turning into a productof the past . The improvement in electronic payments embracing FinTech Lockboxes with a major focus on the price reduction and speed at which you clear cash and apply it to your working capital .


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