What Is Electronic Billing: Everything You Need to Know

Introduction

The evolution of digitalization has completely revolutionized the way businesses operate, particularly with the advent of automation in accounting, transforming financial transactions in the B2B landscape.

Electronic billing (e-Billing) is one such advancement – it has simplified the entire billing process, from creating bills and invoices to facilitating digital payments. It is especially valuable for businesses managing recurring bills, offering flexibility in payment methods.

This blog will provide you with an understanding of what e-Billing is, how it works, and why it’s beneficial for businesses today.

What Is an Electronic Bill (e-Bill)?

An electronic bill, or e-Bill, is a digitally generated version of an invoice that businesses send and receive electronically. It can be sent as a PDF file or in other electronic formats via various digital mediums, allowing customers to access and review invoices efficiently before making payment.

e-Bills are a widely preferred billing method for businesses nowadays because of the convenience they offer. Apart from simplifying the invoice exchange process, digital billing allows customers to set up automated payments to make e-Bill transactions easier and the purchasing process hassle-free, benefiting both businesses and consumers.

What’s Included in an e-Bill?

Pretty much like paper bills, e-Bills contain all the detailed information related to the payment, invoice, order details, etc. Here are the basic components that must be included in an e-Bill:

1. Sender’s & Recipient’s details: An e-Bill must include the sender’s and recipient’s details, such as name, address, and contact number.
2. Invoice details: The e-Bill must specify invoice related details like, invoice number, purchase order number, due date, and issue date. 
3. List of ordered items: This section of e-Bills contains information about the purchased items, quantity, price, and the subtotal amount that the buyer needs to pay. 
4. Payment details: An e-Bill should also contain details regarding the mode of payment, such as credit card, bank transfer, etc., along with the account details, if needed. 
5. Terms & Conditions: These terms cover the transaction between the buyer and seller, including terms of service, payment terms, refund policies, and contractual agreements.

Example of an e-Bill

Below is an example of what a well-rounded e-Bill looks like. It contains personalized account information, such as customer account numbers or references, to ensure accurate tracking and reconciliation.

What Is Electronic Billing (e-Billing)?

Electronic billing, often referred to as e-Billing, is the process of issuing bills to customers electronically instead of through traditional paper mail. The method utilizes digital formats such as email, online portals, or even machine-readable data formats to send and manage billing documents.

Typically, e-Billing combines the billing system of a merchant, the banking system, and a payment portal for the customer. This e-Billing and e-Payment portal enables the payer to get copies of their bills as well as update information. 

As the e-Billing process is quick, effective, and streamlined for both customers and businesses, electronic billing is a better fit for modern accounting teams. It is used by the accounts payable (AP) and accounts receivable (AR) departments to automate workflows and reduce reliance on paper-intensive operations. e-Bills generated by the AR department often serve as the payee and are paid by the AP department, which serves as the payer.

An In-Depth Look Into the e-Billing Process

Here are the steps involved in the e-Billing process:

1) Credit settings

The first stage in any billing procedure is to determine the credit limit and remittance due date. Modern e-Billing solutions manage everything from sales to credit end-to-end to optimize speed and reduce risk.

2) Pricing

The next stage determines the cost of the goods or services delivered. Pricing can be retrieved from a database and applied to accounts or contacts as needed via an electronic billing solution.

3) Bill generation

e-Bills are generated from ERP or accounting system data. They are then put into the appropriate bill template for each recipient—from PDF to EDI. This process is automated and works faster than traditional manual bill creation.

4) Bill delivery

The delivery of e-Bills can take place via email, portal, file transfer, or direct data transmission and can be automated. Bill notifications can be sent through SMS, email, social media, or other methods to notify recipients that their e-Bill is now available via a secure web gateway.

5) Reminders

If the biller suspects that a customer has not opened or paid their bill within a certain duration, an automatic dunning reminder can be sent to encourage quick payment.

6) Payment processing

e-Billing has a unique advantage over paper billing. Clients can be provided with a link to click and pay online via credit card or direct deposit.

7) Tracking and reporting

Tracking and reporting on e-Bill delivery, receipt, and whether the receiver has read or reviewed their e-Bills provides an upper hand when combating late payments and maintaining a healthy cash flow.

Best Practices While Choosing e-Billing Software

Your company can receive payments on time and maintain payment records if you optimise your invoicing and billing procedures. The time it takes to charge and produce invoices frequently makes billing and invoicing highly burdensome. Which is why you need the best-fitting einvoicing and e-billing solution for your business.
Here are a few things to keep in mind while scouting for the best fit:

1) List your requirements

Before trying to find the right fit for your business, it is essential to figure out the requirements and the basic necessities you expect in your ideal billing and invoicing software.

2) Ease of use

Choose a billing and invoicing software system that is simple to use, doesn’t demand a lot of training, and takes little time. Make sure the type of software can quickly produce professional invoices. The people in charge of billing and invoicing can check this parameter.

3) Compare with different softwares in market

You cannot choose the optimal billing and invoicing software after examining only one of the available options. You should contrast the many software programmes that are available and the reviews that have been written about them. Consider the functions of these software packages, their prices, and the distinctive functions that these software solutions offer.

4) Integration capabilities

For companies that utilise numerous systems, integration is a crucial element. All the necessary data may be seen on a centralised dashboard if the invoicing and billing system offers integration. As a result, you won’t have to switch between systems, which will save you time. It minimises manual mistakes while simultaneously speeding up data input labour.

5) Scope of scalability

A software solution that evolves with growing enterprises is necessary. Therefore, you should make sure the software is scalable and will function properly even when you have to produce several invoices and bills each day when picking your perfect invoicing and billing software.

6) Consider your budget

It is important to choose the most economical yet most functional billing software for your business. Post listing out the required feature functionalities you must decide a budget for the software. It is good to get the most sophisticated software however there is no point if you are not going to use all the features.

What Is the Difference Between e-Billing and e-Invoicing?

Electronic billing and invoicing may sound quite similar, but they differ. While electronic billing can include invoicing, electronic invoicing does not encompass all aspects of electronic billing. In essence, electronic invoicing is a subset of electronic billing.

e-Billing	e-Invoicing
It is the process of managing bills online, including bill creation, making payments, and receiving payments.	e-Invoicing is the process of creating and delivering invoices to customers digitally.
e-Billing system in an organization includes electronic invoicing and the payment counterpart.	e-Invoicing is a segment of the e-Billing system, without any payment function.
An e-Bill serves as proof of transaction.	An invoice is a legal document required for financial reporting.

10 Benefits of e-Billing for Businesses

Undoubtedly, the e-Billing process is making the lives of accounts receivable departments a lot easier and more efficient. It helps remove inefficiencies in processes and saves time and money while ensuring more accurate and timely delivery of invoices to clients for quick payment. So, using a well-implemented electronic billing system is more than just a functional improvement; it is a strategic advantage. Let’s take a look at the primary benefits of e-Billing.

1) Makes processes efficient

Electronic bills take much less time to produce and deliver than paper bills. They improve processes, reducing their overall turnaround time.

2) Improve accuracy

By establishing a direct link between an electronic billing system, accounting software, and ERP systems, human error is eliminated from the process.

3) Improve deliverability

Sending paper bills through the mail does not guarantee timely payment collection. Electronic delivery is found to be more flexible and accurate for delivering invoices to clients in the format they prefer.

4) Status visibility

e-Billing makes it easier to understand who has received, reviewed, and responded to their e-Bills, allowing for better-targeted follow-up actions and aiding in cash flow forecasting.

5) Automation

Businesses are attempting to automate tedious manual tasks to improve productivity and free up trained employees to focus on more strategic tasks. The shift from paper bills to e-Billing creates greater opportunities for process automation.

6) Reduce carbon footprint

Paper bills demand more energy and resources to make and deliver. Electronic bills use much less energy and are better for the environment.

7) Streamline bill payments

e-Bills can be provided with payment links that allow for online payments via credit card, debit card, or direct deposit. This makes it easier for customers to pay, helping in streamlining payments.

8) Reduced overheads

Businesses do not have to maintain and operate the machinery used to print and deliver paper bills and pay for postal service, which can result in significant cost savings.

9) Scalability and flexibility

e-Billing is significantly more scalable and flexible than paper billing. With paper billing, a sudden increase in the number of bills requires more investment in printing, process management, and delivery, which can lead to delays. Conversely, if billing volumes decrease, that investment is wasted. In contrast, e-Billing can be easily adjusted to accommodate changes in billing volume, allowing for quick and efficient scaling without the need for additional resources.

10) Improved client experience

Paper bills may appear outdated to customers today. e-Bills however can be presented more professionally, with easier access and payment processing. Thus simplifying and improving customer experience and relationships.

Drawbacks of e-Billing for Businesses

While electronic billing offers numerous benefits, such as cost savings, efficiency improvements, and environmental sustainability, businesses may sometimes encounter some drawbacks in implementing it. Here are some of them:

1. Customer preferences

Despite the convenience that e-Billing offers, there may be some customers who prefer traditional methods of billing. Convincing customers to switch to e-Billing may become a little difficult

2. Regulatory compliance

Ensuring that e-Billing complies with various legal and regulatory requirements concerning electronic transactions, data protection, privacy laws, and retention policies require businesses to continuously monitor and update the system.

3. Integration compatibility

Sometimes, businesses encounter challenges in integrating e-Billing systems with Existing ERPs, accounting platforms, etc.

4. Privacy and security

e-Bills may contain sensitive customer information that must be secured. Despite advances in cybersecurity, a few e-billing systems can be vulnerable to data breaches, hacking attempts, or phishing attacks.

Fortunately, businesses can easily navigate these challenges associated with e-Billing by choosing the right kind of e-Billing system. Moving ahead, let us understand the role of e-Billing systems.

The Role of e-Billing Systems

Software solutions or platforms that help with invoice generation, delivery, and payment acceptance are known as electronic billing systems. Businesses use e-Billing systems to improve the productivity of multiple corporate units, all the way from accounting to customer support.

e-Billing software can be integrated with your existing accounting systems or ERP software to retrieve the relevant details for generating the bills. Once the bills are generated, the system sends them to the respective customer via online mediums like emails or online portals. The system also supports various payment methods, integrating with payment gateways to enable customers to settle invoices electronically.

6 Best Practices While Choosing e-Billing Software

Your company can receive timely payments and maintain payment records if you optimize invoicing and billing procedures. The time it takes to charge and produce invoices frequently makes billing highly burdensome. Which is why you need the best-fitting e-Invoicing and e-Billing solution for your business. Here are a few things to keep in mind while scouting for the best fit:

1) List your requirements

Before trying to find the right fit for your business, it is essential to figure out the requirements and the basic necessities you expect in your ideal billing and invoicing software.

2) Ease of use

Choose a billing and invoicing software system that is simple to use, doesn’t demand a lot of training, and takes little time. Make sure the type of software can quickly produce professional invoices. The people in charge of billing and invoicing can check this parameter.

3) Compare with different softwares in market

Don’t settle on the first billing and invoicing software you find. Compare multiple options, read reviews, and evaluate their features and prices. Look for unique functionalities that meet your business needs.

4) Integration capabilities

For companies using multiple systems, integration is crucial. A billing and invoicing system that integrates well allows you to view all necessary data on a centralized dashboard, saving time and reducing the need to switch between systems. This minimizes manual errors and speeds up data entry tasks.

5) Scope of scalability

Choose a software solution that can grow with your business. Ensure the software is scalable and can handle an increasing number of invoices and bills as your business expands. This will ensure long-term functionality and efficiency.

6) Consider your budget

Select the most cost-effective yet functional billing software for your business. First, list the essential features you need. Then, set a budget and choose software that meets your requirements without unnecessary features you won’t use. This approach ensures you get the best value for your investment.

Conclusion

As businesses seek to stay competitive and drive productivity, many are adopting e-Billing solutions to streamline their financial processes. By digitizing invoicing and enabling seamless transactions, e-Billing enhances efficiency, improves accuracy, and reduces operational costs.

FAQs

Q1. How to set up electronic billing?

To set up electronic billing, contact your bank and credit card issuers to learn about the online billing options they provide. Inquire about the fees involved, such as transaction costs and monthly minimums. You can also set up autopay for automated bill payments; the process may vary by provider.

Q2. What are the common types of e-Billing?

There are two main types of electronic billing systems. They are biller-direct systems, in which systems send bills directly from the issuer to customers via email or a web portal, and bank-aggregator systems, in which systems consolidate bills from multiple issuers into one platform.

Q3. Is e-Bill the same as auto pay?

e-Bill and autopay are not the same; they are distinct concepts. e-Bill refers to receiving bills electronically instead of through traditional mail. Customers can view these bills online and manually authorize payments. Autopay, on the other hand, involves setting up automatic payments for bills.