In the prequel to this post, we discussed traditional accounts payable and bill payment systems as well as their downsides. For part two, we’ll highlight an effective system for small businesses as well as common concerns people have when considering implementation. This example will follow one accounting system (QuickBooks) and one bill payment system (Bill.com), but note that this process can be accomplished with a variety of platforms.
System and processes overview
Bill.com is an industry leader, having over $70B of payments processed through their platform. Users are required to pay for the subscription; costs include a flat rate and additional fees based on number of users/payments processed. For a quick overview of the process:
- Invoices get scanned, emailed, or uploaded into your Bill.com “inbox,” at which point they can be coded by a bookkeeper or other member of your team
- The coded invoice is routed to a manager or the owner for approval and processed for payment
- Bill.com initiates an ACH from the company’s bank account, or sends a check directly to the recipient on your behalf
- Bill.com transfers the data to your accounting system (so you don’t have to enter any data in the accounting system manually)
An advantage of the Bill.com platform is that it integrates with a number of accounting systems, including QuickBooks and QuickBooks Online. You can link your existing QuickBooks information (vendor data, terms, chart of accounts, customers/projects, etc.) to the Bill.com platform, enabling all transactions entered within one system to transfer to the other. (Note this will vary depending on the system you are using; it may be an automatic process that runs in the background, or one that requires the click of a button when logged in.)
Common questions and concerns
Now that you’re familiar with the process, let’s address a few concerns we often hear from companies evaluating whether to implement a bill payment system:
1. “I’m concerned about security.”
The major bill payment platforms all have best-in-class security protocols, as well as SOC reports that are available to the public. More importantly, they have additional built-in security protocols related to logging in and making payments. We recommend using dual-factor authorization when logging in and submitting payments to enhance security protection – it’ll significantly reduce the risk of an attack on your server, or computer leading to fraud perpetrated through the Bill.com platform.
2. “Some of my vendors only take checks.”
The online bill payment system eliminates the need to write checks yourself, but you can still use them as a payment method – the platform will just generate a check and send it directly to the recipient for you. So under this system you don’t have to handle checks yourself, but vendors can still receive checks if they so choose.
3. “My employees or management are not good with technology.”
The major platforms have very intuitive interfaces that even the least tech-savvy individuals can utilize. Most also have smartphone apps available, if you’re more comfortable using a handheld device versus a computer.
4. “I don’t want to pay for another subscription fee.”
The fees for most platforms are manageable, but you have to factor in the time saved managing the accounts payable function (which helps decrease headcount cost). If you outsource your accounting or bookkeeping functions, most firms will foot the bill for the platform because it’s more efficient for processing on their end. They may even have a discount on the subscription fees that can be passed on to your company.
5. “I need multiple people at my company to approve invoices.”
The major platforms allow you to add as many users as you need with any workflow to the system. Additional costs may be added based on the number of users, but they’re reasonable. You can give different levels of approval permissions to project managers, supervisors, division presidents, or anyone at your organization. If you want a specific invoice routed to four different people for approval, that can be done. Conversely, if you’re an SBO who inputs and processes everything yourself, you can follow a more simplified workflow and skip the approval process altogether.
6. “I don’t know how to integrate this with my accounting system.”
The Bill.com service team performs the initial integration and can assist you with getting started on their platform at no additional cost. They also have a fantastic support team as well as a number of resources on their website to assist in making a smooth transition to their platform.
If you’d like to learn more about bill payment systems or have any questions, please contact LRZ Consulting.