Benefits from Accounts Receivable Automation

accounts receivable automation

Do you know the benefits of accounts receivable automation? Conventionally, 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 life has been used for processing payment data associated with payments made by check. Mainstream provided this amenity to improve effectiveness and flow of business transactions streamlining the accounts receivables collection method.

Customers generally 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 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 cost of the bank lockbox is typically a monthly cost along with a per line remittance data processing fee. To process a huge number of checks over time can be expensive with a lockbox.

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

 

 

Weaknesses of a Traditional Bank Lockbox



The lockbox is usually rather high priced . Banks commonlyacquire a monthly rate as well as a per line fee connected withprocessing payment remittance detail .

Lockboxes may include security issues . The traditional bank lockbox still takes a decent measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are a novice to the financial institution or an outsourced service provider . The data from the lockbox can provide all required elements to make a fraudulent check .

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

Traditional Bank Lockboxes Are Causing difficulty for your Customers' AP Department . Corporations are modernizing their AP Department to remove manual task and preferring 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 helpthose companies in a cost effective scalable option for automating Accounts Receivable .

 

 

Advantages of a FinTech Lockbox
Reduction Cost


The major objective check here of the FinTech Lockbox would be to lowerfees per transaction and provide an Accounts Receivable automation tool to helpbusinesses to QUICKLY clear cash and facilitate access to your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments from one place. Instead of flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox provides you with one spot for a house All of your incoming electronic payments made for swifter cash application .
Removes mail float
Mail click here float is a term for the time needed for a check to travel from the payer to the payee by way of the postal service . With the increase in B2B payments electronically , mail float is rapidly turning into a productof the past . The increasing amount of electronic payments using FinTech Lockboxes with a significant focus on the price reduction and speed in which you clear cash and apply it to your working capital .


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