Benefits of using AR Automation

accounts receivable automation

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

Lockboxes have been around for decades and a lot of the traditional bank lockbox's life has been utilized for capturing 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 leverage the bank lockbox to receive check payments in one consistent location.

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

Today, we see a big 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.

 

 

Disadvantages of a Traditional Bank Lockbox



The lockbox can be rather expensive . Banks usuallyacquire a monthly rate as well as a per line rate connected withhandling payment remittance detail .

Lockboxes can include security concerns . The traditional bank lockbox still takes a fair level of manual re-keying information . 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 data from the lockbox provides all click here required elements to create a fraudulent check .

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

Traditional Bank Lockboxes Are Creating a Problem for your Customers' AP Department . Companies are modernizing their AP Department to get rid of manual process and opting to pay their customers electronically via ACH , Credit Card or vCard . These desired methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to servethose businesses in a cost effective scalable option for automating Accounts Receivable .

 

 

Benefits of a FinTech Lockbox
Reduced Cost


The major goal of the FinTech Lockbox would be to reducecost per transaction and produce an Accounts Receivable automation application to permitcompanies to rapidly clear cash and improve 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 heading to the vendor portal to download payment information . The AR Lockbox gives you a single location to hold ALL your incoming electronic payments meant for speedier cash application .
Eliminates mail float
Mail float is a term for the time needed for a check get more info to go 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 thingof the past . The improvement in electronic payments embracing FinTech Lockboxes with a significant focus on the price reduction and speed in which you clear cash and apply it to your working capital .


1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Comments on “Benefits of using AR Automation”

Leave a Reply

Gravatar