Bill Pay seems so simple, doesn’t it? How complicated or expensive could it be? Receive a bill, pay it and you’re done. But like any other process, it’s important to identify and analyze all the processes that come with bill pay. There are three primary processes which I encourage you to think about.
Bills have a variety of payment methods including check, ACH, wire and electronic bill pay to name a few. Each of these payment methods have different costs associated with them. For example, check processing requires a check stock, a stamp, an envelope and don't forget the labor costs associated with it. The costs can differ depending on the payment method. This plan will help you identify ways to move away from those types of payment methods.
An often overlooked cost component of bill pay is the workflow. This process involves high paid resources that approve bills for payment. What are all the workflows associated with your different payment methods? You may have one set of workflow for checks. This may involve three to four individuals. But your approval process for online banking transactions go through a different set of controls defined by your online banking platform. Think about the costs associated with each of your workflow processes. How these costs differ? How many people need to touch a check? How much time do we spend logging into online banking to approve transactions? This will help you identify inefficiencies in each of your workflows and improve in areas that will lower costs.
Often times you will need information about a paid bill including the original bill, a bank statement proving a transaction cleared etc... How much time does it take to retrieve this documentation? Where are the documents stored and how many systems do you need to access to gather this information? I often work with clients who spend upwards of 15-20 minutes researching a single payment. Although rarely considered as part of the bill pay process, researching payments and accessing source documents play a part in the costs.
As you can see the cost of bill pay may be much higher than you may have initially thought. Analyzing all the processes around bill pay will help you understand your costs where you can build in efficiencies and cost savings.