Magazine article Business Credit

What Receivables Outsourcing Services Do Banks Offer?

Magazine article Business Credit

What Receivables Outsourcing Services Do Banks Offer?

Article excerpt

What receivables outsourcing services do banks offer? Major commercial banks offer varying degrees of receivables processing services. These services deal with remittance processing and cash application and have been expanding in scope in recent years.

There are different levels of these services, ranging from a plain vanilla lockbox to advanced cash application and receivables file management. Lockbox: This is the oldest form of receivables outsourcing and represents the outsourcing of remittance handling and bank deposit activities. Credit managers are accustomed to this service and may not consider it as a form of outsourcing.

Data capture: Many banks also offer data capture services, which provide companies with machine-readable files of customer payments. Banks charge for key stroking or for automated reading, such as bar codes. This is a form of outsourcing the data preparation steps and can apply to retail as well as wholesale customer payments. Not all banks offer this for retail lockboxes, however.

Cash application: In this expanded form of outsourcing, companies transmit current receivables files to the bank, which uses the files to apply customer payments. …

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