Features of AR Automation

accounts receivable automation

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

Lockboxes have been around for many years and much of the conventional bank lockbox's lifespan has been utilized for capturing payment information associated with payments made by check. Mainstream offered this benefit to improve effectiveness and flow of company transactions simplifying the accounts receivables collection process.

Customers basically use 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 receive 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 customers A/R workforce and increases their productivity. The cost 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 pricey with a lockbox.

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

 

 

Downsides of a Traditional Bank Lockbox



The lockbox is often rather expensive . Banks normallyacquire a monthly rate as well as a per line rate linked tohandling payment remittance detail .

Lockboxes can contain security issues . The standard bank lockbox still takes a decent amount of manual re-keying data . With the majority of manual data read more entry attendance being entry level-administrative staff who are new to the bank or an outsourced contractor . The information from the lockbox can provide all crucial elements to generate a fraudulent check .

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

Commercial Bank Lockboxes Are Causing a predicament for your Customers' AP Department . Organizations are modernizing their AP Department to get rid of manual task and deciding to pay their clients electronically via ACH , Credit Card or vCard . These desired methods of ePayment are creating an increase in email remittance . FinTech solution companies have bridged the gap to supportthose companies in an economical scalable option for automating Accounts Receivable .

 

 

Rewards of a FinTech Lockbox
Reduction Cost


The primary objective of the FinTech Lockbox would be to reducepricing per transaction and supply an more info Accounts Receivable automation application to permitcompanies to rapidly clear cash and facilitate 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 going to the vendor portal to download and read payment data . The AR Lockbox provides you with one location to house All of your incoming electronic payments created for quicker cash application .
Removes mail float
Mail float is a term for the time needed for a check to go from read more the payer to the payee by means of the postal service . With the increase in B2B payments electronically , mail float is swiftly turning into a thingof the past . The increase in electronic payments embracing FinTech Lockboxes with a significant focus on the cost reduction and speed in which you clear cash and apply it to your working capital .


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