Features of AR Automation

accounts receivable automation

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

Lockboxes have been around for a while now and a lot of the traditional bank lockbox's lifespan has been utilized for capturing payment information associated with payments made by check. Mainstream provided this amenity to improve effectiveness and flow of company transactions streamlining the accounts receivables collection process.

Customers generally leverage 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 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 cost along with a per line remittance data processing fee. To process a large number of checks over time can be pricey with a lockbox.

Today, we see a drastic change with Accounts Payable Departments paying electronically. This change to ePayments has elevated 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 usuallyearn a monthly rate along with a per line rate linked toprocessing payment remittance detail .

Lockboxes may contain security issues . The traditional bank lockbox still takes a decent level of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative staff who are new to website the financial institution or an outsourced contractor . The data from the lockbox provides all needed components to create a fraudulent check .

Lockboxes don’t connect into your accounting system . Bank lockboxes process the 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 Creating issues for your Customers' AP Department . Companies are modernizing their AP Department to eradicate manual process and opting to pay their customers electronically via ACH , Credit Card or vCard . These popular methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to aidthose companies in an economical scalable alternative for automating Accounts Receivable .

 

 

Features of a FinTech Lockbox
Reduction Cost


The major objective of the FinTech Lockbox would be to lowercost per transaction and supply an Accounts Receivable automation tool to helpbusinesses to QUICKLY check here clear cash and facilitate access to 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 get payment information . The AR Lockbox provides you with a single destination to house ALL your incoming electronic payments produced for quicker cash application .
Gets rid of mail float
Mail float is a term for the time required for a check to go from the payer to the payee via the postal service . With the rise in B2B payments electronically , mail float is quickly becoming a thingof the past . The increase in electronic payments embracing FinTech Lockboxes with a primary focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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