Advantages for AR Automation

accounts receivable automation

Are you familiar with 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 a while now and a lot of the conventional bank lockbox's lifespan has been used for processing payment information associated with payments made by check. Mainstream provided this service to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

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

Bank lockboxes are purposefully placed in a central location to reduce 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 data 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 usually a monthly cost along with a per line remittance data processing cost. To process a large amount of checks over time can be costly 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.

 

 

Pitfalls of a Traditional Bank Lockbox



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

Lockboxes may include security issues . The traditional 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 contractor . The details from the lockbox gives you all vital components to produce a fraudulent check .

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

Commercial Bank Lockboxes Are Creating a predicament for your Customers' AP Department . Organizations are modernizing their AP Department here to eradicate manual process and opting to pay their clients electronically via ACH , Credit Card or vCard . These preferred methods of ePayment are generating an increase in email remittance . FinTech solution businesses have bridged the gap to supportthose organizations in a cost effective scalable option for automating Accounts Receivable .

 

 

Advantages of a FinTech Lockbox
Reduction Cost


The main objective of the FinTech Lockbox is usually to reducepricing per transaction and supply an Accounts Receivable automation program to permitorganizations to rapidly clear cash and facilitate access to your working capital .

Simple payment trail
It is easy to track incoming ePayments in one location. Instead of flipping through remittance emails or heading to the vendor portal to download and read payment information . The AR Lockbox provides you with a single destination to hold ALL your incoming electronic payments produced for swifter cash application .
Removes mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee through the postal service . With the increase in B2B payments electronically , mail float is swiftly becoming a thingof the past . The increasing amount of electronic payments choosing FinTech Lockboxes with a major focus on the price reduction and speed at which you clear ar automation solutions cash and apply it to your working capital .


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