Important things about AR Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the traditional bank lockbox's lifespan has been utilized for processing payment data associated with payments made by check. Mainstream provided this amenity to improve effectiveness and flow of company transactions streamlining the accounts receivables collection process.

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

Bank lockboxes are purposefully 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 data back to their customer. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their efficiency. The cost of the bank lockbox is usually a monthly cost along with a per line remittance data processing cost. To process a large number of checks over time can be expensive with a lockbox.

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

 

 

Disadvantages of a Traditional Bank Lockbox



The lockbox could be somewhat high priced . Banks usuallyearn a monthly rate as well as a per line rate connected tohandling payment remittance detail .

Lockboxes may include security issues . The traditional bank lockbox still requires a get more info fair amount of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative employees who are new to the bank or an outsourced contractor . The information from the lockbox gives you all essential elements to make a fraudulent check .

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

Traditional Bank Lockboxes Are Causing issues for your Customers' AP Department . Businesses are modernizing their AP Department to get rid of manual process and preferring to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of read more ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to aidthose firms in an economical scalable alternative for automating Accounts Receivable .

 

 

Features of a FinTech Lockbox
Reduction Cost


The primary goal of the FinTech Lockbox is to lowerpricing per transaction and supply an Accounts Receivable automation tool to helporganizations to click here QUICKLY clear cash and facilitate use of your working capital .

Easy payment trail
You can easily track incoming ePayments from one place. Instead of flipping through remittance emails or going to the vendor portal to download payment information . The AR Lockbox gives you a single location to hold ALL your incoming electronic payments made for swifter cash application .
Removes 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 turning into a productof the past . The increasing amount of electronic payments embracing FinTech Lockboxes with a primary focus on the fee reduction and speed at which you clear cash and apply it to your working capital .


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