Electronic billing, e-billing or eBilling, is a process businesses can use to get paid quickly and more securely without dealing with the hassles of paper bills and check payments.
Electronic bills allow both bill delivery and payment to take place completely online, which improves efficiency while cutting costs. If this sounds like something your business could benefit from, learn more about how invoice management software works and why it may be a good fit for any business with recurring bills.
What is eBilling?
eBilling is a method of sending bills and collecting electronic payments in which bills are delivered over the Internet and customers can pay electronically. eBilling generally involves integrating multiple systems including a billing system, banking system, a customer’s bank bill pay system, and an online interface for the e-billing system. eBilling is most helpful for businesses that send recurring bills to customers.
For example, a utility company charges customers for power bills every month. Each month, the utility company can send an eBill to a customer explaining the month’s charges and offering the ability to pay online.
What is an eBill?
Electronic bills, e-bills or eBill are a paperless option for delivering a bill. Bills can be presented either on a website or as an electronic document, such as a PDF file. This gives customers the ability to review bills before sending payment. Alternately, customers can set up automated payments in order to pay without even touching a button. eBills offer benefits to both billers and customers. Some of the biggest benefits from eBilling include:
- Low cost to deliver bills to customers
- Better security than paper and snail mail
- Option for automatic payments
- Fast payment delivery via ACH
eBills offer a win-win for customers and businesses. Because they are faster, convenient, less expensive, and more secure, everyone involved benefits from electronic billing.
What is an electronic billing system?
Electronic billing systems are computer systems that assist with generating and delivering invoices and accepting customer payments. The flow of an invoice through an electronic billing system typically follows this path:
- Customer billing data is aggregated in a billing system
- Customer bill is generated by billing system
- Billing is passed to electronic billing system
- Bills are aggregated and sent to customer online
- Customer receives new bill notification email
There are two main types of electronic billing software used for e-billing: biller-direct systems and bank-aggregator systems.
As already noted, most utility companies allow customers to log in to the utility website to view and pay bills. This is an example of biller-direct electronic billing.
Some bills can be integrated into a bank’s bill pay system. In this case, users can log in to their bank website and pay bills for several billers through the same interface. This is an example of bank-aggregator systems.
Biller-direct and bank-aggregator are also known as electronic billing formats.
What is the difference between eBilling and e-invoicing?
eBilling and e-invoicing have many similar aspects, but are not entirely the same thing. E-invoicing is simply sending invoices digitally, but the payment feature is not integrated as it is with eBilling.
QuickBooks invoicing is an example of e-invoicing, as users can quickly send invoices by email but payment features are not automatically integrated.
True eBilling also includes the ability to pay as well. Electronic billing and payment solutions are also known as AP automation software. On a utility or bank website, you can both view the invoice and submit an electronic payment. The process for businesses typically requires more advanced software than what a traditional bank offers. For example, AvidPay is an all in one electronic billing and payment solution that allows you to hold payments, review each payment, and pay suppliers from a single dashboard.
What are the electronic billing and coding standards?
Electronic billing software requires bills and payments to be transmitted using an accepted format. These coding standards are industry-wide and set by major associations like the National Electronic Payments Association (NACHA).
There are four main parties involved in electronic billing that must follow these standards:
- The bill payment provider
- The bill service provider
- The consolidator
- The customer service provider
All of the parties work together to handle the end-to-end invoice approval process and customer needs. In some cases, one service provider can offer multiple features in this process flow. AvidXchange, for example, offers complete electronic billing software for businesses.
How do B2B companies use electronic billing?
While most electronic bills are customer-focused, businesses can take advantage of e-billing for B2B transactions as well.
It is another example of a win-win, as both the sender and payer can quickly process and account for bills rather than rely on a manual process. Whether you need to reach individual consumers or other businesses, the benefits of using electronic billing are clear.
In the digital age there is no reason to waste time, resources, and money on paper billing for customers. Give them the option to go paperless with electronic billing. There is nothing to lose and unlimited potential for success.