Features of AR Automation

accounts receivable automation

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

Lockboxes have been around for many years and a lot of the traditional bank lockbox's lifespan has been used for capturing payment information associated with payments made by check. Commercial banks offered this service to improve effectiveness and flow of company transactions simplifying the accounts receivables collection method.

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 helps 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 clients A/R workforce and increases their efficiency. The price of the bank lockbox is usually a monthly fee along with a per line remittance data processing fee. To process a large number of checks over time can be costly with a lockbox.

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

 

 

Shortcomings of a Traditional Bank Lockbox



The lockbox often is fairly expensive . Banks generallyacquire a monthly rate in addition to a per line fee linked toprocessing payment remittance detail .

Lockboxes may contain security issues ar automation solutions . The standard bank lockbox still requires a decent level of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative personnel who are a novice to the bank or an outsourced service provider . The data from the lockbox provides all required components to generate a fraudulent check .

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

Commercial Bank Lockboxes Are Causing a Problem for your Customers' AP Department . Businesses are modernizing their AP Department to eliminate manual process and preferring to pay their clients electronically via ACH , Credit Card or vCard . These popular methods of ePayment are creating an increase in email remittance . FinTech solution companies have bridged the gap to aidthose firms in an economical scalable option for automating Accounts Receivable .

 

 

Benefits of a FinTech Lockbox
Reduction Cost


The major objective of the FinTech Lockbox will be to reducepricing per transaction and supply an Accounts Receivable automation tool accounts receivable automation to allowcompanies to QUICKLY clear cash and improve access to your working capital .

Simple payment trail
It is simple to track incoming ePayments from one location. Rather than flipping through remittance emails or going to the vendor portal to download and read payment information . The AR Lockbox provides you with one location to house All of your incoming electronic payments produced for faster cash application .
Gets rid of mail float
Mail float is a term for the time needed for get more info a check to travel from the payer to the payee by means of the postal service . With the increase in B2B payments electronically , mail float is quickly turning into a thingof the past . The rise in electronic payments using FinTech Lockboxes with a primary focus on the rate reduction and speed in which you clear cash and apply it to your working capital .


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