Should I Use On-line Bill Paying?

“Should I Use On-Line Bill Paying?” The simple answer is Yes. If you are ready to just act, there is no need to read any further. However, if you need convincing, read on.

Here’s an anecdote: When Payless ShoeSource Inc. decided to automate its invoice and payment systems, it was able to cut its A/P staff, from 21 to 17 people.

Eliminate Paper: The best reason to use on-line bill paying is the elimination of handling, filing, and storing pieces of paper. With on-line bill paying, you have all your records at your fingertips.

Save Money: You save money using on-line payment. Each stamp, envelope, and labor of addressing, sealing, and mailing a paper payment costs you money. Multiply it by 10 to 20 payments a day or week, and then calculate the yearly cost, and you can see why Payless and other large companies have gone electronic.

Better Tracking: Once you have paid your bills on-line, it is easy to integrate the payments with your account systems. Many systems provide an automatic download into the most popular accounting systems. Some accounting systems provide the bill-payment option.

Which one? Investigate the most cost-effective solution and sign up. From Spartina’s point of view, cost-effective is not just money. For example, most banks are free. However, if they do not integrate with your accounting system, then the time spent in duplicating the information manually will outweigh the ‘free’ price tag.

Downsides? There is one downside to online bill payment, and that is the generation of exceptions. A recent study showed that it costs billers $155 million to sort out the exceptions, that is payments which cannot be matched to consumers.

One organization documented the two biggest reasons:

1. Invalid account numbers accompanying the payment, which could be caused by typos, lack of consumer understanding, mismatched payments and bill, or other reasons.
2. Account number changes implemented by billers that affect a number of their customers as a result of a merger, acquisition, portfolio sale, billing system change, or other reasons.

As an on-line bill payer, you want to be sure that your account number is accurate. You will be charged a late fee if your payment doesn’t arrive, so it essential to be accurate.

Conclusion: Go for it!

Reference: http://www.billingworld.com/news/briefs/nacha-releases-online-bill-pay-best-practices.html