What is Electronic Billing?

Electronic billing is a method of sending/paying bills via electronic means rather than through the conventional paper billing process. Electronic billing facilitates the billing process, making it easy for customers to receive bills online. This can be done through a supplier portal, via email, or in machine-readable data formats. E-billing enables businesses to digitally send invoices and payments to customers, offering clarity over financial processes.

E-billing works by allowing the payer to access copies of e-bills and manage or update any information. E-bill impacts both accounts payable and accounts receivable teams, helping automate workflows and mitigate over-reliance on paper-based modes of billing.

Understanding an e-bill

An e-bill is a digital version of a traditional paper bill that is delivered electronically, typically via email or through a company’s website or mobile app. Instead of receiving a physical bill in the mail, you get an electronic notification and can view, download, or make bill payments online.

Key components of an e-bill

Among some common components of an e-bill are

• Email notifications when a new bill is available
• Online access through the company’s website or customer portal
• The payment integration feature allows customers to pay online directly
• Automatic delivery of services in each billing cycle

Electronic billing has become a crucial aspect of modern-day billing across multiple industries, such as financial institutions, SaaS businesses, telecommunication providers, and other service organizations, thereby improving operational efficacy and customer journey.

The significant advantages of electronic billing include streamlined payment processing, accelerated delivery cycles, significant reduction in paper-based overhead costs and expenses, and improved billing cycle tracking.

E-bill versus online payment processing

Organizations can use e-bills to maintain digital archives while easing the administrative burden linked with traditional paper-reliant billing mechanisms. However, distinguishing between e-bill and online payment processing is important, as these terms often create confusion.

Electronic billing is targeted at digital delivery and presentation of invoices and statements, whereas online payment systems handle the transaction processing component. Many enterprises use integrated solutions that combine both these billing functionalities to create a smooth digital billing ecosystem.

E-billing is not just limited to invoicing and payment facilitation; it also allows businesses to perform better by rendering clarity over financial matters, aiding stakeholders to keep an eye on payments. These insights can improve the financial decision-making and forecasting/budgeting plans, thus making businesses run smoothly.

Types of e-billing payment systems

E-billing payment systems are of two types, i.e., biller direct or bank aggregator. Here is a breakdown of these types:

Biller-direct e-billing allows a customer to log onto a company’s website to view or pay its bills by entering the banking details and relevant information. Whereas, in bank-aggregator e-billing, a customer logs into their bank’s website for billing and pays using the bank’s payment mechanism.

What is self-billing in electronic billing?

Self-billing in electronic billing is a specialized process through which the customer or payer generates the invoice on behalf of their supplier rather than the supplier creating and sending the invoice directly. This reverses the traditional invoicing workflow where the supplier issues the bills to customers.

Among the main characteristics of self-billing are

Process efficiency: Self-billing is applied to expedite accounts payable processes by reducing the time organizations must wait for suppliers to generate invoices. It mitigates any delays in the traditional billing cycle and allows smooth and faster payment processing.

Industry application: Self-billing is relevant in industries where customers possess more knowledge about delivered products/services than the supplier, allowing accurate invoice generation based on their internal records and delivery confirmations.

Regulatory compliance: Self-billing arrangements require formal agreements between parties, particularly for VAT purposes. Organizations must maintain written agreements that specify the supplier’s consent to receive self-billed invoices and commitment not to issue duplicate invoices for the same transactions.

Operational benefits: This approach streamlines procurement-to-pay cycles, reduces administrative overhead for suppliers, and provides customers with greater control over invoice accuracy and timing. Organizations can integrate self-billing with their enterprise resource planning systems to automate invoice generation based on purchase orders and receipt confirmations.

What is an electronic billing system?

An electronic billing system is implemented as part of the accounting application or ERP system, offering invoicing and accounts receivable capabilities for immediate sending of electronic invoices to customers by email, via a supplier portal, or another electronic method in place of paper invoices that must be mailed.

The electronic billing process comprises the following steps:

• Creating a bill or invoice
• Electronically submitting the invoice to the customer
• Customer processing the invoice for payment and approval
• Notifying the supplier automatically that the invoice was received
• Sending automatic payment reminder alerts to the customer
• Customer making electronic payment to the payee
• System-generated reports and data, payment status, and history

What are some examples of e-billing?

Billing Direct Systems

Some examples of e-billing as a part of biller-direct systems are

• Credit card companies delivering statements through secure online banking platforms
• Utility companies providing customer portals where clients log in to view monthly electricity, gas, or water supply bills
• Telecommunication service providers allowing dedicated websites for mobile and internet service billing.

Bank-Aggregator Systems

Examples of bank aggregator systems in e-billing include:

• Online banking platforms that aggregate utility, credit card, and loan payments in a single dashboard
• Third-party bill management services that collect service provider bills for unified payment processing
• Corporate treasury management systems that consolidate vendor invoices across multiple departments

Specialized E-billing Apps

Self-billing systems: Online marketplace payments, royalties, and affiliate commissions are examples of non-invoice spend where the payer generates the bill on behalf of suppliers.

Subscription-based businesses are deploying recurring billing platforms for monthly service charges.

Enterprise Integration Examples

E-billing systems integrate with existing ERP software for accounting data, CRM systems for customer profiles, and POS systems for transaction records, enabling automated billing workflows across various business functions.

What are the business advantages of e-billing?

Secure and fast invoicing processes, cost-efficiency, ease of record-tracking, automated workflow management, scalability, and improved customer experience.

Here are details of each of the given advantages:

Secure and fast invoicing

Electronic billing systems implement encryption protocols, secure authentication mechanisms, and digital audit trails that improve transaction security beyond traditional paper-based methods. Processing times are reduced from days to hours with automated invoice generation, delivery confirmation, and payment processing workflows. Digital signatures and tamper-evident technologies ensure invoice integrity and mitigate risks associated with postal delivery delays or document loss.

Cost-efficiency

Automation in the billing process is a plus as it minimizes labor requirements for invoice preparation, mailing, and payment reconciliation. Long-term savings compound through reduced storage costs, decreased error-fixation expenses, and minimized overhead costs involved in typical traditional billing cycles.

Ease of record-tracking

Digital billing systems provide easy audit trails with real-time visibility into every transaction, automated archiving, and advanced search capabilities. Organizations can easily access history data, track payment status, and generate compliance reports without manual document retrieval. Integration with enterprise resource planning systems allows data flow between billing, accounting, and CRM functions.

Automation workflows

E-billing allows intricate automation, including recurring invoice generation, payment reminder sequences, late fee calculations, and dunning management processes. Workflow rules can automatically route invoices for approval, trigger payment processing upon authorization, and update customer accounts without manual intervention.

Scalability

Cloud-based e-billing platforms accommodate business growth without proportional infrastructure investment. Systems can handle volume fluctuations, support multiple currencies and tax jurisdictions, and adapt to changing regulatory requirements through configuration rather than system replacement.

Improved customer experience

Self-service portals enable customers to access billing history, schedule payments, update account information, and resolve disputes independently. Multi-channel delivery options accommodate diverse customer preferences while providing 24/7 access to billing information and payment processing capabilities.

What are the disadvantages of e-billing?

Privacy risks, integration and compatibility challenges, initial and ongoing maintenance costs, and technical/operational risks are some of the disadvantages of e-billing.

Privacy risks

Sensitive customer information and payment details can become vulnerable if the system is not encrypted or secured. Vulnerable payment systems can lead to data breaches, phishing, and fraudulent activities, leading to data theft.

Integration and compatibility challenges

Some businesses struggle with the integration of e-billing platforms with existing ERP, CRM systems, or accounting platforms. Moreover, certain legacy systems may block e-billing features, hindering the performance and steadiness of the e-billing process.

Ongoing maintenance costs

Recurring expenses often arise from payment gateways, support, and software updates as a part of e-billing. These can lead to increased financial strain on the businesses, thereby bringing in financial frustration over expenses and costs’ management.

Technical/operational risks

Internet outages, system glitches, and other technical issues can disrupt the billing process and make businesses reliant on software providers to sort out issues before aggravating.

How does SubscriptionFlow facilitate e-billing processes?

SubscriptionFlow facilitates e-billing via a comprehensive billing automation framework, flexible charge structure management, advanced pricing model support, intelligent invoice generation and management, multi-currency and payment gateway integration, and automated renewal management.

Here are details of the mentioned features:

Billing automation framework

SubscriptionFlow is an all-inclusive subscription management software that powers recurring billing and payment processing. It provides businesses with automated electronic billing capabilities that can expedite the entire subscription lifecycle. The automated system bills customers as per subscription plans even if customers modify their plans midcycle. It allows systematic billing without any errors that can occur if these processes are manually managed.

Flexible charge structure management

SubscriptionFlow offers three types of charges, i.e., one-time charges, recurring charges, and usage-based charges. This flexibility enables organizations to implement complex pricing models while maintaining automated billing.

Advanced pricing model support

SubscriptionFlow allows users to design and implement hybrid billing by setting up one-time, recurring, or usage-based charges. They can set up flat pricing, tiered pricing, usage-based pricing, and more, allowing diverse business models through a single e-billing platform.

Intelligent invoice generation

Create and communicate smart invoices that are tailor-made to seem elegant, simple, and easy for customers to understand, encouraging them to pay with smart Pay Now buttons embedded into each invoice. The platform generates professional, customizable invoices automatically while maintaining consistency across all customer communications.

Multi-currency and payment gateway integration

SubscriptionFlow supports multiple currencies and can be integrated with dozens of leading payment gateways to cater to clients anywhere in the world. This global capability enables organizations to implement e-billing across international markets while also adhering to localized billing requirements.

Renewal automation

SubscriptionFlow can automate subscription renewals, including notifications and billing, to maintain uninterrupted service, ensuring continuous revenue streams while reducing administrative overhead associated with manual renewal processes.