Many businesses love the use of e-billing because it streamlines their accounting process and eliminates stress at the end of each billing cycle. Quality accounting software allows businesses to eliminate manual entry of paid bills into a digital accounting system. When it’s all handled through the finance and accounting software, that software can automatically receive an e-bill, process it, add it to accounts payable, then pay it without the need for much manual work.
Once a futuristic option only available in a few cases, e-Billing has now become the norm thanks to its ease, convenience, security, and speed. Modern finance is now largely centered on e-billing, and important elements of accounting such as accounts payable and accounts receivable are dependent on processing e-bills.
What is electronic billing?
Electronic billing (e-Billing) is the general term for the process, act, and infrastructure associated with paying, processing, and receiving payments online. In electronic billing, as much as the entire billing process is hired digitally—from generating bills and invoices to allowing these bills to be paid electronically. Computers and software handle the generation of these bills and payments with human direction.
What is an e-Bill?
An electronic bill or e-Bill is a bill generated online, usually created through the use of an accounting or finance platform or software solution. This usually allows the individual or business making a payment to login to a system or platform and access a record of previously paid bills and other information.
What’s on an e-Bill?
Generally, electronic bills look like a digitized version of classic paper bills. They feature many of the same elements:
- Date
- Amount of payment
- Date the payment is due
- Payment terms
- Other relevant details
Because these bills are created and viewed digitally, they’re capable of displaying functional hyperlinks that can send payers to a payment portal where payment can be made.
In cases where companies still use and process paper bills, an ‘e-Bill’ might simply be a scanned and digitized version of the paper bill in a PDF format. With that said, what appears on an e-bill depends largely on the company, billing situation, and electronic billing system through which the bill was generated.
What is an electronic billing system?
An electronic billing system is a software solution or online platform that allows for the sending, receiving, and payment of bills online as well as a range of other features and reporting solutions. Electronic billing systems give flexibility and convenience to businesses when it comes to their accounting and billing, and the more user-friendly the platform, the less time-consuming the process of billing becomes.
Traditional billing requires paper, checks, and hard copies. Even in the early days of digital accounting, paper billing had to then be manually transferred into digital form. With a robust electronic billing system, this entire process is handled digitally and largely automatically— freeing up accounting professionals and businesses to focus on other tasks and increasing their efficiency.
Not all electronic billing systems are the same, and not all offer the same level of features. It’s up to businesses to determine which features matter most to them and will best suit their billing and accounts receivable/accounts payable processes.
How does e-Billing work?
Here are the basic steps of e-Billing:
- Generate an invoice: The first step in e-billing is to generate an electronic invoice through an e-billing software or through an online billing system.
- Send the invoice: Once the invoice is generated, it is delivered to the customer through email, online portal, or other electronic means.
- Set payment reminders: Payment reminders can be set so that the customers get pinged if bills are not yet paid. This reduces the likelihood of late customer payments.
- Receive payment: When the customer makes a payment, it is processed electronically through the e-billing system. The payment can then be deposited into the company's bank account.
- Reconcile accounts: After the payment is received, the e-billing system reconciles the accounts to ensure that the payment matches the invoice amount. Any discrepancies are flagged for further investigation.
- Record the transaction: Finally, the e-billing system records the transaction in the company's financial records, updating the accounts receivable and general ledger.
What are the benefits of e-Billing?
There are many benefits associated with e-billing. Some benefits include:
- Accuracy: In electronic bill processing systems, bill processing is automated— which means that there’s little manual data entry required to match the requested amount and payment terms of bills. Meanwhile, electronic billing also reduces the rate of errors. Bills that are received can be automatically paid with a few touches of buttons, reducing the chance for human error.
- Visibility: e-Billing makes it easier where in the payment process a bill is.
- Speed of payments: electronic billing improves the efficiency of bill processing, helping make the tasks associated with it simpler and faster.
- Improved customer relationships: Customer relationships can be strengthened with e-Billing as a result from a faster, more convenient payment process, improved accuracy and transparency, and increased communication in bill reminders and notifications.
- Efficient collections: Having an automatically generated record is also one of the most powerful benefits of electronic billing.
The best systems are also capable of integrating fully with existing accounting software systems to make the process even more streamlined.
What are the drawbacks of e-Billing?
The only potential drawback of electronic billing comes in the process of transferring from paper to electronic. This process isn’t always smooth, especially when dealing with a deeply established organization that is entrenched in its current systems. But the best e-billing systems make this transition as smooth and streamlined as possible.
Who uses e-Billing?
e-Billing is used by a variety of individuals and organizations to streamline the invoicing and payment processes, including but not limited to:
- Businesses: Many businesses use e-Billing to send electronic invoices to customers and receive electronic payments, reducing the time and effort required for these tasks.
- Government agencies: Government agencies reduce paperwork and administrative costs by using e-Billing to process payments from vendors and suppliers.
- Healthcare providers: Healthcare providers use e-Billing to submit claims to insurance companies and process payments from patients.
- Law firms: Law firms use e-Billing to manage their invoicing and payment processes for clients.
- Non-profit organizations: Non-profit organizations use e-Billing to process donations and manage their accounting processes.
What is the difference between electronic billing and einvoicing?
While electronic billing and electronic invoicing are closely related, they’re technically not the same thing. While real electronic billing may be defined in such a way that it includes invoicing, electronic invoicing doesn’t include all facets of electronic billing.
E-billing includes the entire process of managing bills online— generating a bill, submitting the payment, receiving the payment, and more. Invoicing, on the other hand, is often directly tied to the accounts payable department. Accounts payable is the department within a company that’s responsible for receiving, processing, and approving payments from suppliers and vendors. They’ll use e-invoicing in order to process invoices and submit them for the company’s books or official record.
That said, quality electronic billing systems (like BILL) feature a built-in invoicing feature that makes this entire process as streamlined and simple as possible.
What are the Standards for Electronic Billing and Coding?
To help with the standardization and security of electronic billing, there is a general set of industry standards for coding electronic bills. These standards are set by the National Electronic Payments Association, or NACHA. NACHA determines the accepted format in which electronic bills can be generated and transmitted.
Everyone involved in the process of electronic billing must follow the standards set forward by NACHA, from the bill payment provider and bill service provider to the consolidator and customer service provider.
Create an e-Bill with BILL
There are multiple ways to quickly import your invoices into BILL and create an e-BILL. Start streamlining your invoicing and payment processes today. Try BILL’s risk-free trial.
