Are you familiar with the benefits of accounts receivable automation? Conventionally, a bank lockbox has been used by organization Accounts Receivable departments to increase efficiency.
Lockboxes have been around for a while now and much of the conventional bank lockbox's lifespan has been utilized for capturing payment data associated with payments made by check. Big 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 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 fee along with a per line remittance data processing fee. To process a huge amount of checks over time can be costly 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.
Pitfalls of a Traditional Bank Lockbox
The lockbox often is somewhat costly . Banks commonlyacquire a monthly rate along with a per line fee linked toprocessing payment remittance detail .
Lockboxes can contain security issues . The traditional bank lockbox still requires a decent level of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are new to the bank or an outsourced contractor . The details from the lockbox gives you all essential elements to generate a fraudulent check .
Lockboxes don’t connect into your accounting program . Bank lockboxes process your payments and remittance information and thenforward you the information . Your organization still must input that click here information into your ERP to clear the cash .
Financial Institution Lockboxes Are Causing a predicament for your Customers' AP Department . Corporations are modernizing their AP Department to remove 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 aidthose firms in a cost efficient scalable solution for automating Accounts Receivable .
Benefits of a FinTech Lockbox
Reduction Cost
The primary objective of the FinTech Lockbox is usually to reducepricing per transaction and produce an Accounts Receivable automation application to letbusinesses to rapidly clear cash and improve 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 get payment data . The AR Lockbox gives you one destination to hold All of your incoming read more electronic payments created for faster 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 means of 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 a primary focus on the rate reduction and speed at which you clear cash and apply it to your working capital .