Benefits of Accounts Receivable Automation

accounts receivable automation

Are you familiar with 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 much of the traditional bank lockbox's life has been utilized for capturing payment data associated with payments made by check. Mainstream offered this amenity to improve effectiveness and flow of business transactions streamlining the accounts receivables collection process.

Clients generally leverage 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 information back to their client. Because banks are processing checks and remittance this decreases the customers A/R workforce and increases their efficiency. The price 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 expensive with a lockbox.

Today, we see a drastic 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 could be somewhat high priced . Banks usuallyearn a monthly rate as well as a per line rate connected tohandling payment remittance detail .

Lockboxes may include security issues . The standard bank lockbox still takes a decent measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative staff who are a novice to the financial institution or an outsourced service provider . The details from the lockbox gives you all necessary components to generate a fraudulent check .

Lockboxes don’t tie into your accounting system . Bank lockboxes process your payments and remittance information thensend you the ar automation solutions information . Your team still must input that data into your ERP to clear the cash .

Traditional Bank Lockboxes Are Causing problems for your Customers' AP Department . Businesses are modernizing their AP Department to get rid of manual process 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 businesses have bridged the gap to servethose firms in an economical scalable alternative for automating Accounts Receivable .

 

 

Features of a FinTech Lockbox
Reduced Cost


The main goal of the FinTech Lockbox is usually to decreasepricing per transaction and supply an Accounts Receivable automation program to letcompanies to rapidly clear cash and improve access to your working capital .

Trouble-free payment trail
It is simple to track incoming ePayments in one place. Instead of flipping through remittance emails or going to the vendor portal to download and read payment information . The AR Lockbox provides you with a single destination to hold All of your incoming electronic payments made for quicker cash application .
Removes mail float
Mail float is a term for the time required for a check to go from the payer to the payee by way of the postal service . With the rise in B2B payments electronically , mail float is rapidly becoming a productof the past . The rise in electronic payments choosing FinTech Lockboxes with an essential focus on the fee reduction and speed in which you clear cash and apply it to your working capital .


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