Industry trends clearly indicate an increase in electronic invoice presentment, particularly in the small to mid-sized b2b space. What is not so clear is the leading method, technology, or solution for b2b invoice presentment and payment. Typically businesses will email invoices to their business customers and call it electronic invoice presentment. And while this approach is simple, it doesn’t do much for automating the order-to-pay cycle. The sad truth is that often these emails are printed, run through a payables approval process and then a check is issued, or an ACH credit is sent and payment instructions arrive at the biller via email. And while this could be viewed as electronification of the bill presentment and payment, it is anything but automated. This is where banks can really step in to help their business customers, while expanding their suite of non-credit or treasury management services.
According to Global Industry Analysts, Inc. over the past few years, biller-direct EBPP has grown exponentially thanks to “improved Internet security, governance, as well as protocol technologies and applications”1. In 2013, Fiserv reported that 53.4% of households were using biller-direct online payment websites2; a statistic that holds true today. However, the b2b electronic bill presentment space is sadly lagging far behind. According to FirstData, the uncomfortable reality in today’s world of accounts payable and receivables is that except for the largest businesses “nearly 90 percent of all B2B payments are still made with paper checks stuffed into envelopes and sent through the mail”3. The real question is how to affect change in when paper, either mailed invoices or printed emails, is the least common denominator for billing and remittance processing.
Banks could play a key role in shoring up the technology, security, and implementation of biller direct EBPP or EIPP portals. At US Dataworks we have seen first-hand how a top 30 financial institution used our technology to expand their treasury services to include biller-direct electronic bill presentment for middle market businesses. Working with our bill presentment partner, Revo Payments, we implemented an electronic bill presentment solution designed to simplify the order-to-pay process and reduce the reliance on emails. The complete solution offers a unique industry-specific user interface which makes it simple to implement EBPP for a wide variety of businesses. Packaged with other Treasury Management services, it takes the pain and risk out of electronic bill presentment. Eventually, we see this solution expanding into a true integrated receivables product that not only presents the invoices, but reconciles all incoming payments regardless of whether they are mailed in payments, incoming ACH, wires or even Bitcoin.
Banks that are looking to expand their relationship with small to mid-sized business should evaluate how EBPP or EIPP can round out their product offerings. There are a number of market segments that are traditionally underserved in this area. In fact, many MUD districts, property management companies, HOA’s, small physician groups, and professional service providers are still relying heavily on email or snail mail for their bill presentment. These businesses are experts at what they do, but not experts in the nuances of electronic bill presentment and payment. This is why banks can bridge that gap and provide a valuable new treasury management service.