Paying bills on time is one of the easiest ways for small businesses to build credit and establish a good lending reputation. Automating business payments makes this even easier. Choosing a good online bill pay (also known as accounts payable) platform to facilitate this for you is just the first step, but it may be the most important. Here’s what to look for in your search.
What you need to know
- Online bill pay improves cash flow visibility by automating the scheduling, processing, and analysis of payments. This eliminates the administrative cost and risk of human error that comes from manual accounting.
- By choosing a bill pay platform that syncs with accounting and expense management software, you can enhance the accuracy of your data and financial forecasts.
- With modern cybersecurity, stronger paper trails, and real-time tracking, online bill pay is also more secure than traditional payment methods.
What is online bill pay for?
Managing business payables can be a headache if you don’t have the right tools, but using online payment systems can simplify that process. These applications automate the scheduling and processing of bill payments, reducing administrative costs and the chance for human error. You can choose to send fixed or variable amounts depending on the expense. Most bill pay platforms also offer real-time financial tracking and details that help you and your accountant manage your cash flow.
How to set up online bill payments for your startup
The actual setup process for online bill pay is simple. Your banking provider probably already offers one which should suit your business needs. If not, or if you desire certain functionality that your provider doesn’t support, be sure to compare the following when choosing an online bill pay platform:
- Security features
- Transaction details
- Fees
- Payment processing times
- Cross-compatibility with your business checking account, accounting software, and analytics software
Ensure any platform you’re considering connects to your banking provider.
Bill pay–accounting software integration
Most financial software is designed to connect with other applications and platforms. One example is integrating an online bill pay platform with accounting software, which enhances the accuracy of your data and eliminates the need to enter your information multiple times.
Your accounting software also tracks revenue from electronic payment gateways and point-of-sale systems. Combining that capability with automated bill payments gives you detailed insights into both cash inflows and outflows, dramatically reducing the amount of tedious work that goes into your financial planning.
How online bill pay helps you manage your finances
Growth and scale don’t happen without an efficient accounts payable system. Here are some things an online bill pay platform can do to help you manage your business finances:
Improve cash flow visibility
Look for platforms with real-time tracking, reporting, and categorization, so you can locate inefficiencies at a glance and use real-time data to compile the reports and spreadsheets used for cash flow analysis and tax filings.
There are scenarios where you won’t be able to use online bill pay, like purchasing supplies in-person and treating clients to meals. These can be rolled into your accounts payable platform via business checking integration and cross-platform syncing.
Forecast and budget
By syncing your bill pay with accounting and expense management software, your accounting software should be able to run profit and loss income statements based on all your expenses that you can use for financial forecasting and budgeting. Bill pay and expense management software can show where you spend money by automatically categorizing your expenses.
This data is crucial for scaling your company. Businesses that automate their bill pay can more efficiently project cash flow and manage expenses.
Enhance your financial security
Modern, legal banking providers provide standard account security measures like multi-factor authentication and encrypted transactions. Digital payment platforms are safer and more secure than using checks or cash, or entering your credit card information into a payment portal.
If your vendor only accepts checks, some bill pay platforms will write and mail checks on your behalf, so you don’t shoulder full responsibility if it goes missing.
Cost savings and financial efficiency
Without online bill pay, you’re losing money between bank fees, the opportunity cost of your employees doing manual work that could be automated, and the sometimes dramatic costs of human error. Automated bill pay eliminates all of these problems and makes your business more efficient.
See how much time and money you could save with Bluevine.
