Are you aware of the advantages of accounts receivable automation? Traditionally, a bank lockbox has been used by business Accounts Receivable departments to increase expediency.
Lockboxes have been around for a while now and a lot of the conventional bank lockbox's lifespan has been used for processing payment information associated with payments made by check. Big provided this amenity to improve effectiveness and flow of company transactions streamlining the accounts receivables collection method.
Clients basically use the bank lockbox to receive check payments in one consistent location.
Bank lockboxes are purposefully placed in a central location to decrease mail delivery time, which also assists with lowering the company’s 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 price of the bank lockbox is typically a monthly cost along with a per line remittance data processing fee. To process a large 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 elevated the FinTech trade with {solutions| designed with the goal of decreasing business costs of processing incoming payments.
Shortcomings of a Traditional Bank Lockbox
The lockbox could be rather high priced . Banks typicallyearn a monthly rate as well as a per line fee linked tohandling payment remittance detail .
Lockboxes can contain security concerns . The standard bank lockbox still takes a decent measure of manual re-keying information . With the majority of manual data entry attendance being entry level-administrative employees who are a novice to the financial institution or an outsourced service provider . The click here data from the lockbox can provide all vital components to generate a fraudulent check .
Lockboxes don’t tie into your accounting system . Bank lockboxes process your payments and remittance information and thenforward you the information . Your personnel still must key in that information into your ERP to clear the cash .
Standard Bank Lockboxes Are Causing a Problem for your Customers' AP Department . Companies are modernizing their AP Department to eliminate manual task and preferring 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 businesses have bridged the gap to helpthose businesses in a cost effective scalable alternative for automating Accounts Receivable .
Features of a FinTech Lockbox
Reduction Cost
The primary goal of the FinTech Lockbox is to decreasecost per transaction and supply an Accounts Receivable automation tool to helpbusinesses to rapidly clear cash and improve access to your working capital .
Trouble-free payment trail
It is simple to track incoming ePayments from one place. Instead of flipping through remittance emails or going to the vendor portal to get payment information . The AR Lockbox provides you with a single location to hold All of your incoming electronic payments produced for speedier cash application .
Removes mail float
Mail float is a term for the time needed for a check to travel from the payer to the payee by way of the postal service . With the increase in B2B payments electronically , mail float is rapidly becoming a thingof the past . The increase in electronic payments choosing FinTech Lockboxes with a significant focus on the fee reduction and speed in which you clear cash and apply it to your working capital .