Businesses, especially small ones, are always looking for ways to cut costs and operate more efficiently. One of the areas where that is fairly easy to do is billing and invoicing. Automating this process, by offering options such as automatic bill pay and electronic invoice presentment, can save you money and make your business run smoother.
There are essentially two ways you can automate your billing. You can continue to send out paper bills and invoices but allow people to pay electronically on your end, or you can go to a completely electronic system, with virtual bills and electronic invoice presentment as well as electronic payment options.
The first option is fairly easy for most businesses to do without the need to outsource billing processes. A business can send paper bills as it always has but offer an electronic payment option. That could be the option to pay with a credit card, with a service such as PayPal or through an electronic withdrawal from the customer’s bank. Some banks will even send paper payment to a business if an online account can be set up, which to the customer is as seamless as true electronic bill pay. Electronic bill pay not only is more convenient for customers, but it can save you time because you are likely to get fewer emails and phone calls with questions about billing. It also can save you money because less staff time will be spent on processing payments.
If you are willing to go truly paperless in both the billing and payment process, you can save a lot of money in the long run. Going to this option likely will require you to shift your billing and invoicing to an outsource billing company, which can cost more upfront, but it will save you a lot in the long run. When you do electronic billing and electronic invoice presentment, you save an average of about 11.5 cents per billing statement. If you have 1,000 customers and bill monthly, that’s more than $1,300 a year saved just on the paper and postage costs. Outsourcing your billing and invoicing also saves in other ways. You will need fewer staff and your existing staff will spend fewer hours on billing and invoicing. Also, doing electronic billing will provide you with a convenient and reliable archive of bills and invoices.
For most businesses, switching to electronic billing makes sense, both from a financial and operations standpoint. You should weigh the potential pros and cons, however, before making a decision on whether to change your billing practices.
