E-billing may not yet be in the category of death and taxes, but it's not too far away from becoming a business certainty.
That is the consensus of several industry observers. They point out
that electronic bill presentment and presentation (EBPP) has been
going on in various forms for almost 20 years. It dates back to the
advent of Electronic Data Interchange (EDI) and then, later on, to
private corporate networks.
In fact, the majority of large companies already use e-billing in
some form, particularly in the business-to-business (B2B) space.
According to Avi Greenfield, an analyst with independent consultancy
Doculabs Inc. in Chicago, some 65% of large and medium-sized
companies present at least some of their invoices electronically, and
59% make some of their payments electronically. Key segments already
enmeshed in the technology include utilities, telecommunications
companies and financial services firms, he adds.
What is new is that the Internet will no doubt replace the two
earlier venues as the most popular means for e-billing, most agree.
And as that happens, they say it's only a matter of time before
individual consumers start using the technology en masse.
"It's all about convenience for the customer," says Rick Edwards,
assistant vice president at the Amica Companies, which is based in
Lincoln, R.I. and is the nation's oldest mutual insurer of autos.
"We're a service organization, and that means we want to transact
business in the medium of the customer's choice."
Amica has been presenting bills to customers and accepting payment
over the Internet for about two years, and before that the company
accepted electronic wire transfers through other means.
Although fewer than 10% of customers' payments come in via the
Internet, Edwards says he's not worried about ROI or other issues.
"It continues to grow every month, and I expect it to continue to
increase," he said. "We look at this as a service we offer to
customers to make it easier and more convenient for them to pay their
bill."
Further, he says, as people become more comfortable doing business
over the Net, the numbers will grow even higher.
According to a recent study by Gartner Inc. of 100 large companies,
about 20% of all B2B invoicing is electronic, taking place mostly
through EDI. The firm expects e-billing over the Internet to outgrow
and eventually outpace the older technologies. Avivah Litan, a vice
president and research director at Gartner, says, "The whole pie of
e-transactions is growing, but the Net is increasing in proportion to
the others."
There are different options for getting started, but they won't be
cheap. Litan counsels newcomers to expect to pay between $200,000 and
$400,000 for hardware, software, labor and implementation services --
and that's not even for the highest-end systems, which can cost more
than $1 million.
A number of software vendors exist to help businesses Web-enable
their bills. Key players here include CheckFree Corp. in Norcross,
Ga., edocs Inc. in Natick, Mass., and Avolent Inc. in San Francisco.
There are also service providers like Princeton eCom Corp. in
Princeton, N.J., which will create and host your e-billing system
based on its own software.
On the consumer side, there's a burgeoning number of so-called
aggregator sites like CheckFree, AOL and Yahoo. These sites do deals
with individual vendors -- credit card companies, mortgage firms and
other kinds of companies that most consumers need to deal with. The
consumer then goes to one site to sign up to receive e-bills and pay
them automatically via credit card, rather than having to face the
alternative: going to each of his vendor's sites, signing up on all
of them and then returning each month to multiple sites to pay his
bills.
To get started, Gartner's Litan suggests that companies XML-enable
their existing billing applications, so the option exists to transmit
them over the Web if desired. Also, a company will need to create an
electronic trading hub with their customers and partners -- an
extranet, for instance. Finally, she suggests not neglecting other
important features: dispute management, reconciliation to be able to
track all the transactions flying back and forth, workflow and
routing of payments.
Amica's Edwards says it's possible to begin with baby steps. It may
even be preferable, in fact, to separate the bill presentation from
the payment options. You can e-mail customers to let them know their
bills are ready, and then direct them to a secure, password-protected
part of your corporate Web site, for instance. They can then find out
when their next payment is due, and for how much, and the total
amount still outstanding. Perhaps they then write a check for the
amount and send it in via snail-mail or pay by credit card over the
phone.
Once the electronic billing presentation system is working well, then
perhaps it's time to offer e-payments, Edwards suggests -- or vice
versa. Amica started by accepting e-payments first, then expanded to
allow customers to view their bills online.
Interestingly, his company receives more e-payments online than it
sends out e-bills.
"Some customers like to get the paper bill, but when it comes time to
pay they go online," he said.
MORE INFORMATION ON THIS TOPIC:
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