Benefits of AR Automation

accounts receivable automation

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

Lockboxes have been around for decades and a lot of the conventional bank lockbox's lifespan has been used for processing payment data associated with payments made by check. Mainstream provided this benefit to improve effectiveness and flow of company transactions simplifying the accounts receivables collection method.

Clients basically use 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 assists with lowering the company’s 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 expensive with a lockbox.

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

 

 

Drawbacks of a Traditional Bank Lockbox



The lockbox could be fairly costly . Banks generallyearn a monthly fee as well as a per line rate related toprocessing payment remittance detail .

Lockboxes may contain security concerns . 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 staff who are a novice to the bank or an outsourced contractor . The data from the lockbox gives you all crucial components to make a fraudulent check .

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

Financial Institution Lockboxes Are Causing difficulty for your Customers' AP Department . Organizations are modernizing their AP Department to get rid of manual task and opting 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 companies have bridged the gap to helpthose corporations in a cost efficient scalable solution for automating Accounts Receivable .

 

 

Advantages of a FinTech check here Lockbox
Reduction Cost


The major goal of the FinTech Lockbox is usually to reducefees per transaction and produce an Accounts Receivable automation application to alloworganizations to QUICKLY clear cash and facilitate use of your working capital .

Simple payment trail
You can easily track incoming ePayments from one location. Rather than flipping through remittance emails or heading to the vendor portal to download and read payment data . The AR Lockbox provides you with one spot for a house All of your incoming electronic payments produced for more rapid cash application .
Gets rid of mail float
Mail float is a term for the time needed for a check to go from the payer to the payee by means of the postal service . With the rise in B2B payments electronically , mail float is rapidly turning into a productof the past . The increasing amount of electronic payments embracing FinTech Lockboxes with a primary focus on the price reduction and speed at which you clear cash and apply it to your working capital .


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