Benefits of using Accounts Receivable Automation

accounts receivable automation

Do you know the advantages of accounts receivable automation? Conventionally, a bank lockbox has been used by organization Accounts Receivable departments to increase expediency.

Lockboxes have been around for decades and much of the conventional bank lockbox's life has been utilized for processing payment data associated with payments made by check. Big provided this service 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 strategically placed in a central location to decrease mail delivery time, which also assists with lowering the company’s 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 efficiency. The price of the bank lockbox is typically a monthly cost along with a per line remittance data processing cost. To process a huge amount of checks over time can be expensive with a lockbox.

Today, we see a huge 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 often is somewhat costly . Banks commonlyearn a monthly rate along with a per line fee connected toprocessing payment remittance detail .

Lockboxes can include security concerns . The traditional bank lockbox still takes a fair measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative workers who are a novice to the bank or an outsourced service provider . The information from the lockbox gives you all necessary components to generate a fraudulent check .

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

Commercial Bank Lockboxes Are Causing issues for your Customers' AP Department . Organizations are modernizing their AP Department to remove manual process and preferring to pay their customers electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to servethose businesses in a cost effective scalable alternative for automating Accounts Receivable .

 

 

Advantages of a FinTech Lockbox
Reduced Cost


The main objective of the FinTech Lockbox is usually to decreasefees per transaction and supply an Accounts Receivable automation check here application to permitbusinesses to QUICKLY clear cash and improve access to your working capital .

Trouble-free payment trail
It is easy to track incoming ePayments from one location. Rather than flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox gives you a single spot for a hold ALL your incoming electronic payments made for quicker cash application .
Removes mail float
Mail float is a term for the time website needed for a check to go from the payer to the payee by means of the postal service . With the increase in B2B payments electronically , mail float is swiftly becoming a productof the past . The increasing amount of electronic payments choosing FinTech Lockboxes with a major focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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