Towards better bill payments: How Bill.com alternatives provide modern spend management solutions.
My sister used to put on her favorite music, cranked up high, when the time came to sit down and pay her bills – it got her in the flow for a job she hated to do, but needed to get done. Music is a good way to ease a painful process, but having the right tools eliminates the pain and instead creates an excellent user experience for getting payments out the door. Music is then optional, rather than a necessity.
Years ago, companies like Bill.com recognized the need for easier bill pay processes in order to keep money flowing smoothly. For a long time, finance teams appreciated the ease with which these more automated bill payment platforms handled this vital component of spend management.
But with the shift towards real-time accounting, forward-thinking organizations recognize that modern spend management solutions require a more holistic view that doesn’t silo bill payments into a separate tool. After all, paying bills doesn’t happen in a vacuum. A piecemeal approach doesn’t allow for the “big picture” needed to effectively manage financial activity today.
As an organization grows, the volume of bills paid increases and becomes a more complex problem, especially since spending across several teams using various payment methods must be approved, tracked, executed, and categorized before finally being booked to the GL. Decentralized spending trends have made accounts payable increasingly complicated and laborious, even with legacy bill payment platforms. As a result, many teams now see the benefits of switching away from older systems, like Bill.com, to newer systems that integrate all aspects of spend.
Those benefits occur at a high level, in that a consolidated platform integrates multiple tools for easier access and a comprehensive view of spending activities. But many benefits also occur at a more granular level. By considering the user experience within and across teams, modern spend management solutions offer intuitive, customizable workflows that increase productivity and strengthen accountability.
Why it’s important to have a complete picture.
As corporate spending became more decentralized, many finance teams adapted by stitching together a patchwork quilt of disconnected tools. With this approach, processing a simple purchase often requires several disparate platforms or offline steps – and that’s assuming everything goes well. With different systems for purchase orders and approvals, expense reimbursements, corporate credit cards, reconciliation, and bill payments, organizations become more vulnerable to breakdowns in workflow. Finance team members usually have to do a lot of time-consuming manual work in order to integrate the data found in each platform. As we’ve all experienced, manual work is more prone to errors and is not an efficient use of resources.
Paying bills is one function with no room for errors. The people who are processing bills need to know that:
- An invoice has been properly approved.
- The terms of payment are clear, including timing and any amortizations.
- The form of payment is defined.
- Any W9s are collected.
- Contracts are cross-referenced.
- The invoice is properly categorized and tagged.
- P.O. matching occurs.
- Payments will be delivered on time.
Failure to balance all of the elements involved can lead to a need for corrections, problems during an audit, and inefficient accounting operations.
The importance of user experience and workflows in bill payments.
Replacing a legacy bill payment software platform with a more modern, comprehensive spend management platform that incorporates bill payments, results in a system where workflows are intuitive, automated where possible, and reflect the reality of what happens in an organization.
However, without a good user experience, companies run the risk of losing the time-saving advantages of changing bill payment systems. Let’s take a look at how seemingly small interface details can elevate the overall user experience.
Built-in purchase orders and approvals: For accountability and efficiency, the approval process should be clear. With approval routing and automation rules, purchase requests and associated approvals can be processed quickly and be able to adapt to organizational changes.
At-a-glance context: Receiving an invoice is another step that shouldn’t happen in a vacuum. Before processing an invoice, it must be matched with supporting documents, including a corresponding purchase order number and receipt. A system that automatically matches these three elements will help ensure that all invoices are valid before payment occurs.
When paying a bill, it’s also important to know the context. The inclusion of supporting documentation with an invoice can help answer the question, “Why did we purchase this?” Often, the answer lies in the email chain that led to the invoice creation. Forwarding the email chain with the invoice can save AP team members from having to chase down employees to get answers. (Of course, a well-designed invoice inbox allows for any extraneous or private conversations to be deleted.)
Supporting documents also provide context. A good bill payment platform uses optical character recognition (OCR) technology to separate the invoice from other documents, which eliminates the need to sort through paperwork while still organizing supporting documents. To save manual effort, OCR technology also reads the invoice and auto-fills details like vendor, invoice date, amount, payment due date, and invoice number when paying a bill.
Vendor management: We all want to avoid duplicate payments and get the best price possible. A comprehensive vendor portal is one that provides payment history and other details at a glance. Bill payers should be able to see:
- Previous transactions with a vendor.
- Historical payments.
- Open bills that haven’t been paid yet.
Automatic amortization: Bill payment for subscription or prepaid services must be amortized in the GL. That can create extra work, unless a bill payment function gives the option for amortization to happen automatically during the period of the prepaid services.
Smart workflows: A flexible platform allows the purchaser to choose the payment timeline, with options to pay immediately, pay by due date, or schedule a payment for a specific future date. An intelligent spend management system can work backwards from the chosen date to determine when a payment goes out, taking into account any time necessary for transferring funds for ACH payments, and little delays that can be forgotten, like post office holidays if you’re mailing checks.
Visibility: One of the central advantages of a modern spend management system is increased visibility into spending activity. With a bill payment system that consolidates spending by check, ACH, and corporate cards, management can pull real-time reporting of actual spend at any time.
Real-time reporting tools give you the power to track spend owners and view payment statuses as soon as each transaction occurs.
Vendor accountability: Intelligent bill payment software can ensure that a vendor has submitted a W9 before issuing payment. When a vendor uploads a W9, OCR technology can recognize the document type and store it accordingly.
Precision: To know exactly how funds have moved, it’s useful to be able track the banking transaction for each bill payment. In a drive to precision, a good bill payment solution will help improve the bank reconciliation process by making bank withdrawals for each bill paid, instead of in a lump sum that consolidates a day’s worth of bills.
Payment options: A bill payment platform that consolidates all payment types in one place surfaces opportunities to shift payments from checks and ACH to cards (often virtual cards created securely on the fly), where a company can earn cashback on their expenditure. Maximizing cashback allows finance teams to improve the ROI of a bill payment platform.
A good spend management platform elevates the bill payment function with additional features that contemplate and address the workflows involved in making purchases. When advanced bill pay functionality is available on the same platform as corporate cards, a company is afforded a real-time view into all company-wide spending on any day of the month. Modern spend management automates all of the workflows, from purchase orders and approvals to booking the transaction to the GL, and leaves finance teams with much more time for higher-value work.
If you’d like to learn more about how a comprehensive spend management system can help you manage your bill payments with greater visibility and efficiency, let’s talk.
Airbase offers a one platform solution to manage all non-payroll spend. It provides oversight and control over spending with real-time reporting and automatic syncing directly to your general ledger. Control all payments – physical cards, virtual cards, ACH, and checks – from one place. Close faster. Empower employees. Control spend.
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