Online Bill Payments: Why They’re Important and How They Work
According to Accenture, virtual card spend is projected to grow to a whopping US$355 billion by the end of 2022, up from $136 billion in 2017. What’s more, as digital business spending like this goes mainstream, transaction volumes are estimated to surpass $9 trillion annually.
With spending on the rise, it’s vital for finance teams to find fast and efficient ways to reconcile payments and pay vendors.
Enter online bill payments.
Here’s everything you need to know about online bill payments, and why they’re important for your organization.
What are online bill payments?
Online bill payments – otherwise known as online bill pay or B2B payments – allows finance teams to quickly and easily pay suppliers from a digital bank account or spend management platform, without the need for back-and-forth paperwork.
Using an online bill pay tool is a convenient and easy way to make payments and keep your finances organized, without slowing down your month-end reconciliations or, worse, year-end close.
Why are online bill payments so important?
Online bill payments are important for a variety of reasons. For example, finance managers can:
- Regain time by simplifying bill creation from invoices using OCR technology, and schedule in bulk your bill payments.
- Automate the transfer of a payment transaction to the general ledger.
- Guarantee a visible audit trail so that finance teams are always prepared for an audit.
- Improve relationships and quickly update vendor information by managing payment details, tax documentation, and payments in real time.
Contrary to popular belief, bill payments are also easier to control and more secure. Financial institutions use top security and encryption protocols to keep your transactions secure and your data and information safe. What’s more, many spend management platforms (like us!) are often SOC2 compliant.
3 business benefits of online bill payments
There are several other advantages of online bill payments that will help make life easier for your accounting and finance teams.
1. Automation, automation, automation
With online payments, you can set up automatic payments for recurring spend such as rent, utilities, software subscriptions, training, and so on.
This will help you pay your bills on time and avoid late payment fees. You’ll also get email notifications when bills are due or when bills have been paid.
2. It’s convenient
Most online bill pay services have website and/or mobile app options so you can take care of your finances at your convenience. It also allows you to have all your payments for all of your various vendors and individuals in one place, instead of having to sign into various websites to pay your bills each month.
This will save you so much time when organizing all of your monthly bills.
3. Save the environment (yes, really!)
Paying your bills online is also more environmentally friendly! You don’t need to print out bills, write paper checks, and mail your payment. It goes without saying that digitization reduces the burden placed on paper and plastic.
Do more than just pay your bills
Many online bill pay tools allow you to do more than just pay bills. You can create and monitor budgets, conduct financial forecasting, and analyze and manage vendors, often from one single platform.
Managing your bill payments this way allows you house end-to-end spending under one roof, creating visibility into your organization’s spend trends. Ultimately, this helps your organization create more agility for the future.