Advantages for Accounts Receivable Automation

accounts receivable automation

Are you aware of 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 a while now and a lot of the conventional bank lockbox's life has been used for processing payment data associated with payments made by check. Big provided this benefit to improve effectiveness and flow of company transactions simplifying the accounts receivables collection method.

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

Bank lockboxes are strategically placed in a central location to decrease mail delivery time, which also helps 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 typically a monthly cost along with a per line remittance data processing cost. To process a huge amount of checks over time can be costly with a lockbox.

Today, we see a huge change with Accounts Payable Departments paying electronically. This shift 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 is usually relatively expensive . Banks commonlyacquire a monthly rate along with a per line fee linked toprocessing payment remittance detail .

Lockboxes can contain security issues . The standard bank lockbox still takes a fair amount of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative workers who are a novice to the financial institution or an outsourced contractor . The information from the lockbox gives you all crucial elements to make a fraudulent check .

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

Traditional Bank Lockboxes Are Creating difficulty for your Customers' AP Department . Corporations are modernizing their AP Department to remove 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 businesses have bridged the gap to assistthose companies in a cost efficient scalable solution for automating Accounts Receivable .

 

 

Benefits of a FinTech Lockbox
Reduced Cost


The primary goal of the FinTech Lockbox is usually to reducecost per transaction and ar automation solutions supply an Accounts Receivable automation application to letcompanies to rapidly clear cash and facilitate access to your working capital .

Simple payment trail
It is simple to track incoming ePayments from one place. Rather than flipping through remittance emails or going to the vendor portal to download and read payment data . The AR Lockbox provides you with one place to house All of your incoming electronic payments meant for faster cash application .
Gets rid of mail float
Mail float is a term for the time required for a check to travel from the payer to the payee via the postal service . With the rise in B2B payments electronically , mail float is swiftly becoming a thingof the past . The rise in electronic payments using FinTech Lockboxes with an essential focus on the price reduction and speed in which you clear cash read more and apply it to your working capital .


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