Benefits of AR Automation

accounts receivable automation

Do you know 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 a lot of the traditional bank lockbox's life has been utilized for capturing payment information associated with payments made by check. Big provided this amenity to improve effectiveness and flow of business transactions simplifying 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 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 productivity. The cost of the bank lockbox is usually a monthly fee along with a per line remittance data processing cost. To process a huge amount of checks over time can be expensive with a lockbox.

Today, we see a drastic 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.

 

 

Weaknesses of a Traditional Bank Lockbox



The lockbox could be relatively expensive . Banks generallyacquire a monthly fee as well as a per line fee connected tohandling payment remittance detail .

Lockboxes can include security issues . The traditional bank lockbox still requires a decent measure of manual re-keying data . With the majority of manual data entry attendance being entry level-administrative personnel who are a novice to the financial institution or an outsourced service provider . The details from the lockbox gives you all necessary elements to make a fraudulent check .

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

Traditional Bank Lockboxes Are Causing difficulty for your Customers' AP Department . Organizations are modernizing their AP Department to eradicate manual process and deciding to pay their customers electronically via ACH , Credit Card or vCard . These popular methods of ePayment are producing an increase in email remittance . FinTech solution companies have bridged the gap to helpthose companies in a cost efficient scalable solution for automating Accounts Receivable .

 

 

Benefits of a FinTech Lockbox
Reduction Cost


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

Simple payment trail
You can easily track incoming ePayments in one location. Instead of flipping through remittance emails or heading to the vendor portal to download payment information . The AR Lockbox provides you with one location to hold ALL your incoming electronic payments created for swifter cash application .
Eliminates mail float
Mail float is a term for the time required for a check here to travel from the payer to the payee by way of the postal service . With the rise in B2B payments electronically , mail float is accounts receivable automation quickly turning into a thingof the past . The rise in electronic payments embracing FinTech Lockboxes with a significant focus on the cost reduction and speed at which you clear cash click here and apply it to your working capital .


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