The Basics of Using eBilling to Make Purchasing Easier
Electronic billing (eBilling) takes the manual effort out of getting payment from buyers and paying your suppliers for the goods you need. By paying electronically, you eliminate paper bills and checks, cumbersome mail postage and shipping, and potential issues from missed or late payments. And electronic invoices arrive on time, every time, without potential losses or delays.
Using an eBilling system to track and report on payments also gives businesses added visibility and budgetary control. It takes the hassle out of paying people or getting paid and eliminates manual research and spreadsheets in favor of electronic bill payments, invoices, and orders. This frees up considerable hours for your AP and AR teams, allowing them to get caught up and even tackle the “someday” projects.
This article walks you through the basics of using an eBilling system, including its benefits and the steps you’ll need to bring an eBilling system online within your organization.
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What is eBilling?
Electronic billing, called eBilling, refers to sending bills and invoices over the Internet, eliminating the need for paper documents. It allows businesses to transmit bills directly to customers via email, a web portal, or other electronic means. eBilling makes it easier, faster, and more convenient for customers to receive, review, and pay their bills.
Besides the efficiency benefits of electronic bills, electronic payments offer an eco-friendly alternative to traditional billing. They reduce the environmental impact associated with printing and postage to pay bills. They also streamline billing processes and increase procurement visibility.
Are eBilling and eInvoicing the same thing?
While eBilling and eInvoicing are often used interchangeably, they refer to two distinct activities within the broader scope of electronic document transfer. Both eInvoicing and eBilling help businesses move from paper invoices to digital financial transactions.
eInvoicing: Electronic invoicing specifically involves sending an invoice from a supplier to a buyer after the delivery of goods or services. The invoice might come through an electronic document interchange (EDI), via an API, payment portal, online marketplace service, or even an email with a PDF.
eBilling: Electronic billing extends beyond invoicing, covering the entire billing process, including paying invoices electronically. A procurement system like Order.co allows you to pay all your invoices through a consolidated billing system, regardless of how your vendor prefers to receive payment.
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The benefits of eBilling
The financial and operational benefits of electronic billing make its implementation well worth the effort. Electronic billing allows you to save money on every purchase, reduce the time spent conducting accounting activities, and get the most out of the data and insights in your procurement practice.
Consider using an eBilling system to unlock the following benefits:
Cost savings: An electronic billing system significantly reduces the costs of paper billing. It eliminates potential cash leaks due to late fees and lost discounts, saving businesses substantial cash every year.
Time efficiency: Processing invoices electronically speeds up the accounts payable workflow. It allows instant bill delivery and faster approval cycles, reducing the time from invoice receipt to payment.
Error reduction: Manual billing has a high potential for introducing human error due to hand-keyed data entry. An electronic billing system eliminates manual processes and enables error-checking capabilities that reduce mistakes. This leads to fewer disputes and delays from billing errors. It also frees your accounting team from the frustration of researching billing issues.
Enhanced security: An electronic invoice and billing system provides better security than paper billing. With an electronic system, sensitive financial information is encrypted and transmitted securely. This provides the right financial controls to reduce risks like procurement fraud.
Accessibility and convenience: Digital invoices are accessible through the billing system from anywhere, offering the sender and receiver convenience. This accessibility also facilitates better invoice tracking and management.
Cash flow management: With faster processing times and real-time visibility into payment statuses, businesses can manage their cash flow effectively. This helps businesses plan and forecast financial positions with greater accuracy.
Process automation: Many electronic billing systems offer automation features that streamline invoicing. Automation eliminates manual tasks, reduces workload, and improves overall efficiency in accounts payable operations.
Data analytics and reporting: An electronic billing system often includes analytics tools that provide insights into customer spending patterns and vendor performance. This data is valuable for strategic decision-making and optimizing cash savings.
By adopting electronic billing for paying AP invoices, businesses can leverage benefits that enhance operational efficiency, reduce costs, and promote sustainability.
Setting up procurement for eBilling
The more of your vendors that use eBilling, the better and more efficient your procurement process will be. More businesses are starting to understand the power of automation to free them from the traditional procurement challenges. Over 50 percent of businesses are pursuing large-scale adoption of cloud-based procurement processes to bridge the gap.
Use the following steps to set your organization up with a procurement and eBilling system:
1. Collect your procurement information
Collecting procurement and vendor information is a crucial first step in automating the procurement process. This involves gathering comprehensive details about your vendors, including their contact information, payment terms, historical purchase data, and existing contracts or agreements. It also means compiling a list of frequently purchased items, their specifications, and preferred suppliers for each category.
Pulling together all your vendor and invoice info helps you create a complete database that electronic billing systems use to automate procurement tasks. A well-structured platform streamlines purchase order creation, invoice matching, and payment processing. Automated procurement workflows reduce manual and human error and improve the efficiency of accounts payable operations. Additionally, having a centralized repository of this information facilitates better communication with vendors and enables more strategic sourcing decisions.
2. Build a procurement process
Strong procurement relies on consistency, transparency, and accountability for each transaction. A well-documented process outlines the procurement cycle's key stages, including:
- Identifying needs
- Researching and selecting suppliers
- Negotiating contracts
- Creating purchase orders
- Processing invoices
- Making payments
When building the procurement process, be sure to fully outline the expectations at each stage of the purchase process. Detail required tasks, outline parameters and rules for sourcing and buying goods, assign review responsibilities, and set decision-making criteria. Include parameters for evaluating suppliers, considering price, quality, delivery reliability, and alignment with your company's values or sustainability goals to ensure value and foster good vendor relationships.
In addition to a documented policy, consider using intake templates and forms for uniform documentation and communication. You can standardize requisition forms, supplier evaluation forms, purchase orders, and contracts.
Once established, build a system for assessing and optimizing the process. Be sure to take stakeholder feedback into account as well. A comprehensive, documented procurement process will lead to smoother operations, cost savings, better vendor relationships, and improved compliance.
3. Establish an approval process
A robust purchase approval process ensures all purchases align with the company's broader financial, legal, and safety objectives.
Begin by defining clear thresholds for different levels of purchasing authority to ensure that purchases of varying sizes receive the appropriate level of scrutiny. For instance, smaller, routine purchases may only require manager approval, while significant investments necessitate review by the finance department and top management.
The purchase approval process should also include a review workflow to assess each purchase against legal compliance, financial viability, and compliance risks. This involves checking contracts for legal protections, evaluating the financial impact of the purchase on budgets and cash flow, and assessing any potential vulnerabilities introduced by outside vendors or their products.
By implementing a structured approval process, your organization minimizes risk, keeps spending in line, and upholds company standards across all purchasing activities.
4. Onboard vendors to the system
Onboarding vendors to the electronic billing and procurement system lets stakeholders get what they need while enabling efficient invoice and payment processing.
To onboard vendors, collect contact details, payment preferences, and tax identification numbers as identified in the steps above. Get them set up within the procurement and electronic billing system in the best way, whether through direct integration, API setup, marketplace integration, or email billing.
Some platforms, such as Order.co, even allow you to use offline vendors and manage the purchase and vendor management process from within.
How Automation Can Solve Finance Teams’ Biggest Challenges
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Ensuring an eBilling system meets your compliance needs
Financial compliance features ensure your financial operations align with internal and external requirements and standards. These features help enforce adherence to various laws, regulations, and guidelines that govern financial transactions, tax obligations, and record-keeping practices.
Compliance features allow you to create accurate, beneficial financial reports for stakeholders like investors, customers, and regulatory bodies. They demonstrate a commitment to transparent and accountable financial management. They also aid in detecting and preventing procurement fraud by establishing secure and verifiable processes for invoicing and payments. Financial compliance features avoid unnecessary risk, enhance operational integrity, and secure data within your procurement process.
Get the best of electronic billing and procurement features with Order.co
Procurement is becoming increasingly complex. With the right system, you give your stakeholders the freedom to independently fulfill their supply needs while keeping spending and payments in control.
From sourcing to settlement, a next-generation procurement system like Order.co integrates the best features of an electronic billing system into a procure-to-pay purchasing platform that takes the burden off teams’ shoulders.
Effortlessly manage payments and leverage your accounting as a strategy for growth. Request a demo of Order.co today.
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