Benefits of AR Automation

accounts receivable automation

Are you familiar with the benefits of accounts receivable automation? Traditionally, a bank lockbox has been used by business Accounts Receivable departments to increase expediency.

Lockboxes have been around for decades and much of the conventional bank lockbox's lifespan has been used for processing payment data associated with payments made by check. Commercial banks offered this benefit to improve effectiveness and flow of business transactions simplifying the accounts receivables collection process.

Customers basically 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 assists 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 customers 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 huge amount of checks over time can be costly with a lockbox.

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

 

 

Downsides of a Traditional Bank Lockbox



The lockbox often is somewhat costly . Banks normallyearn a monthly rate in addition to a per line fee related tohandling payment remittance detail .

Lockboxes can include security issues . The traditional bank lockbox still takes a decent amount of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative staff who are new to the bank or an outsourced service provider . The information from the lockbox can provide all crucial elements to produce a fraudulent check .

Lockboxes don’t connect into your accounting program . Bank lockboxes process the payments and remittance information and thenforward you the information . Your team still must input that information into your ERP get more info to clear the cash .

Commercial Bank Lockboxes Are Creating a predicament for your Customers' AP Department . Corporations click here are modernizing their AP Department to remove manual process and opting to pay their customers 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 assistthose companies in a cost efficient scalable solution for automating Accounts Receivable .

 

 

Benefits of a FinTech Lockbox
Reduced Cost


The main objective of the FinTech Lockbox is to lowercost per transaction and produce an Accounts Receivable automation application to helpbusinesses to QUICKLY clear cash and improve access to your working capital .

Trouble-free payment trail
You can easily 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 a single location to hold All of your incoming electronic payments made for speedier cash application .
Eliminates mail float
Mail float is a term for the time required 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 rapidly turning into a thingof the past . The increase in electronic payments using FinTech Lockboxes with an essential focus on the rate reduction and speed in which you clear cash and apply it to your working capital .


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