Tired of spending too much time chasing down people to approve paper invoices? Burdened with too many paper checks, invoices and purchase orders scattered around your business? Feeling covered in paper? If so, now may be the perfect time to learn more about bill payment software, how it works, whether it’s secure and whether it will give you more control of your corporate finances.
You’ll get answers to all those questions here. With this guide, you’ll be in a better position to decide whether investing in this software makes sense for your business and whether now is the right time.
What is bill payment software?
Bill payment software consists of a set of coded instructions customized for automating business payment processes from start-to-finish. The software classifies, matches, and verifies invoice and payment data and then forwards that data to your accounting system to be posted.
Conceptually, automated bill payment software functions like the global positioning satellite application on your smartphone.
You type in where you want to go and the software instructs and guides you how to get to every stop, turn and reroute. The best part? You’re in control — but guided to get there faster.
Read more: What is AP Automation Software? What Does it Do? How Does it Boost Your Business?
In a similar conceptual fashion, you load bill payment software into your corporate online network and set it up to handle your specific payment processes. The software guides you through the steps and along the path to your destination: paying your company’s bills. Step by step, the software leads you through this journey.
How does bill payment software work?
Bill payment software works by managing the customer’s accounts payable process from receiving an invoice all the way to paying suppliers. Simultaneously, the software maintains all the customer’s existing banking relationships and workflows.
By automating this invoice and payment process, customers have 24/7 visibility into payment and approvals. On behalf of those customers, the software provider’s service team manages the suppliers and executes payments.
Importantly, customers can stay abreast of every step of this process such as:
- logging in to see all pending approvals populating their queues;
- accessing the invoices at any time from any device connected to the Internet;
- seeing exact amounts of invoices, how long they’ve been in the queue and who should approve them next;
- once approved, specifying to whom and when they send payments; and
- sending payments in the exact way recipients want to receive them such as by electronic payments or checks.
Bill payment software relies on various conditions to execute tasks. For example, if your company’s policy has a rule (condition) that the CFO must approve any invoice above $1,000, the software can identify that and automatically forward that invoice for CFO approval.
Is bill payment software safe and secure?
Bill payment software reduces the threats associated with paper process. The technology stores payment information online and uses security protection technologies to reduce fraudulent attacks.
Using paper to pay bills is inherently unsafe. Fraudsters excel at stealing information off paper checks. And paper can be easily lost or stolen.
Positive Pay, for example, is a service bundled within bill payment software offerings that offers secure financial transactions. Positive Pay alerts bank tellers to fraudulent checks brought to them.
Using this service, a company shares with its bank a list of the payee, check number and dollar amount of every check it processes.
When a person presents a check, the teller automatically compares the list to the check, flags any that don’t match and informs the company. The company then instructs the teller whether or not to cash the check.
Is bill payment software worth it?
Bill payment software is beneficial absolutely worth the investment because, unlike paying bills manually, it reduces the need for people to get do these highly repeatable tasks. This amounts to saved time, resources and money.
Automated bill payment software minimizes data entry and paper invoices, drives consistency in payment processes, more securely pays suppliers and helps controls cash flow.
A Goldman Sachs report revealed that it costs a business $22 to pay a single invoice with a paper check. That’s about 10 times more than the estimated $2 to pay an invoice using bill payment software.
The software also delivers time saving benefits. We learned from Henderson Properties, one of our real estate service customers, that bill payment software shortened payment and invoicing processing times by at least 90 percent.
Read more: 5 AP Software Insights You May Not Know
Whether an electronic payment system is worth the investment boils down to a few crucial questions: Does it help your business save money, accelerate payments, generate more revenue and improve customer relationships?
Does bill payment software give you more or less control?
Automated bill payment software gives you more control of your finances.
From virtually anywhere at any time, you’ll be able to see the status of a bill, check the status of approvals or make a payment.
We’re aware you may have concerns about using this technology. You might want to know – with good reason – if you’ll lose control of your finances and won’t be able to keep track of everything going on in paying your bills.
You may think you won’t be able to access you invoice and payment data when you want to, or won’t know about mistakes made.
All valid concerns, yes, but the truth about bill payment software is quite the opposite.
Next steps
Because of last year’s pandemic, the need to automate bill payments has accelerated. Many companies suddenly found themselves unable to get in their offices to process paper checks. But they still had to pay their vendors and suppliers. If they had bill payment software, hurdles could have been avoided.
Do you want your company to be one of those that automates? Or is using paper processes still the right path?
It’s a potentially lucrative — or costly — decision.