In this age of heightened environmental awareness, using paper processes to pay bills is becoming anachronistic. Electronic Bill Presentment and Payment allows businesses to turn off the paper: By Jason Olson

These days it seems most businesses are tag going green in some way. It's fashionable, and people want their business or employer to have a positive impact on the community. In reality, most businesses struggle with adopting environmentally sustainable practices due to either high cost of implementation or because they simply don't know what options are available. One business cycle that's evolving into a bona fide green opportunity, while at the same time improving profitably, is the area of bill presentment and payment.

Traditional methods of sending a paper invoice involve printing, assembling, and mailing. Once delivered, the invoice is copied, filed, and often paid by paper cheque, which is also printed, assembled, and mailed. The old fashioned method of paying a paper bill is manual, resource intensive and is quickly becoming outdated. That argues in favour of widespread adoption of electronic billing and payment systems to replace paper bills and cheques. Electronic billing presentment and payment (EBPP) systems have been available in Canada for some time. In spite of this, businesses have been slow to "turn off the paper" and adopt EBPP solutions, for several reasons. Generally speaking, people tend to resist change and can be apprehensive when new technologies are developed that improve or replace manual processes. Also, while most people use email at work and at home, and have accepted electronic payments for personal bills, few have the experience to champion an EBPP strategy in the workplace. Most importantly, though, businesses have been slow to implement EBPP solutions because the solutions themselves haven't met their customers' expectations.

Early EBPP models

Early EBPP models were based on driving the customer to a web site to view and pay the electronic bill. The Biller Direct Model and the ConsolidatorModel are two examples. In the Biller Direct Model, customers (bill payors) view their bill by logging on to their account on the biller's web site. Customers have largely rejected this model because it is inconvenient to have to visit multiple web sites and maintain separate login and password information for each bill. The Consolidator Model brings together billers and financial institutions to create a one-stop online bill presentment and payment platform. Because of a lack of financial controls (for example, dual payment authorization is not available) and limited biller lists, many customers have not embraced this model. Many billers have also resisted this EBPP solution due to high startup costs and low customer acceptance. To date, both models have not delivered a very efficient electronic system for bill presentment and payment. Studies have shown that most billers have less than five percent of their customers accepting their bill electronically. Given the obvious savings and benefits of EBPP it is not surprising that businesses have created their own solution, one that has evolved naturally out of existing and accepted electronic systems.

Billing by email

The solution that is showing signs of success is one that makes a straight substitution of email for regular mail. Smaller billers have realized electronic bill delivery can be accomplished easily by "pushing" electronic bills (ebills) to customers by email. As a business process, email billing is a natural extension of paper billing. As ebill functionality is now a standard feature in most major accounting software programs billers are able to deliver ebills at virtually no cost. Larger billers are starting to take notice and have begun working with experienced third-party ebill presentment companies to deliver sophisticated ebills with enhanced security and marketing capabilities. Not surprisingly, billers are beginning to encourage their customers to pay electronically by placing electronic payment notifications on their bill or website. As ebills become the standard form of presentment, businesses are implementing ebill receipt, approval and payment processes; streamlining the accounts payable workflow. Designing a process for receiving an ebill can be as simple as creating a designated email box, such as ebills@ yourcompany.ca, and informing the biller. Once the ebill is received it can be forwarded for approval(s) and then re-forwarded to a designated accounts payable "Approved ebills" email box. More sophisticated online ebill routing systems are emerging to deliver enhanced controls and approval mechanisms, and will even convert paper bills to ebills so that all bills can be processed in the same way. The EBPP cycle is complete when the ebill is paid electronically. Several options exist for businesses to deliver electronic payments to their vendors. Businesses can use electronic payment software or they can visit their financial institution to discuss electronic funds transfer options. Prior to adopting an electronic payment solution, businesses should conduct their own due diligence to ensure it meets internal control, audit trail, and resource expectations. Today, businesses have access to simple and cost-effective methods for going green with their billing and payments by eliminating paper entirely. The future of EBPP has finally arrived and with it, savings in time, postage, cheque stock, envelopes and regular paper for both the biller and the customer.

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