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Electronic Billing System
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Electric billing system is a system where customer billing documents such as billing statements, invoices and other related documents are transmitted electronically by a business to its customers as well as other relevant parties. Electronic billing system is also known as electronic presentment and payment or even electronic invoice presentment and payment.
Historically, electronic billing system was an initiative of the National Automated Clearing House Association Council, who up to date, are credited for communicating and promoting different forms of electronic Invoicing in the United States of America. This system came with the ability to electronically settle payments of goods and services to suppliers. This way, bank customers and billing companies utilize internet and advanced telecommunications to make payments conveniently as well as accessing important information about billing.
Currently, the electronic Invoicing uses a protocol known as the Open Financial Exchange, a protocol that would easily allow the firms to integrate their systems, only that the protocol has not been embraced widely, especially by the banks, who mostly fear loss of their customers’ vital information to their rivals. To avoid such a scenario, Spectrum, a joint venture of financial institutions, vendors, billers and Insurance companies are developing a second standard protocol know as Interactive Financial Exchange which is said you be more interactive and user friendly.
It is worth noting that there are different types of provider of electronic invoicing. They include; Bill-direct and Banka aggregator. Bill-direct approach works by consumers making direct payments to a biller that issues bills, which are received through the company’s website. A good example of this is a public utility company such as Water or Electricity Company that offers this kind of payment service. The second type of billing system Is Bank- aggregator: This type of electronic billing system works when payments are made at a consolidator or aggregator site, usually from the bank website of a consumer.
Electronic billing system, fronted as the best method of bill payments, comes with benefits that cannot just be ignored. With this kind of system, speeding up the cash flow cycle is enabled since invoices are sent to customers faster as well as incurring lower invoice costs. Secondly, this system helps in reducing administration overheads and reduces making mistakes. In addition to these, It enables the achievement of better visibility of cash flows, cash collection and approval of Invoices. Apart from helping in reducing paper usage and energy consumption, it also promotes building of rapport and improvement of relationships among suppliers and buyers as well as reducing the administrative costs.
As much as the benefits of provider of electronic invoicing outweighs the challenges it comes with in either its adoption or use, such challenges cannot go unmentioned especially if one is to get a clear and an all round picture of this system. Well, to be precise, the adoption of this system especially In the banks, has brought about different challenges due the complexity nature. Some banks even fear adopting this process for fear of not cross-promoting other bank services to their regular customers even though experts recommend that this kind of system is ideal for this marketing type.
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