E-Billing (Electronic Billing) Explained

E-Billing (Electronic Billing) Explained

Electronic billing or e-billing isn’t a new concept these days. In fact, like cellphones it’s something we’ve grown so accustomed to that it has become the basic fabric of any modern business — assuming we’re exclusively discussing first-world markets.

But electronic billing systems are in no way perfected or without meaningful variety. The components that make up electronic billing are often similar, but their integration abilities and consumer-facing UI and UX can make all the difference.

Today we’re going to back up a bit and review what ebilling is in its essence and then make recommendations on how to find the best ebilling system for your business (that’s why you’re here, right?).

Let’s start with the basics.

What is ebill?

Electronic billing or e-billing is when any business or seller sends its invoices or bills via the internet and requests that the customer pays that bill electronically.

In other words… electronic billing is exactly what it sounds like. It’s a broad term of any business accepting cash online. All you need is two parties with computers, the internet, and a transaction and you’ve got some form of electronic billing.

History of ebilling

Invented alongside emails, internet banking, and accounting software in the wake of the Information Age, electronic billing has been in the public sphere for the past few decades.

“In the United States, the Council for Electronic Billing and Payment of the National Automated Clearing House Association (NACHA) is credited with broadly promoting and communicating various forms of electronic billing in the early 2000s. NACHA promoted activities and initiatives that facilitated the adoption of electronic payments in the areas of Internet commerce, electronic bill payment and presentment, financial electronic data interchange (EDI), international payments, electronic checks, electronic benefits transfer (EBT) and student lending. Certain electronic billing applications also provide the ability to electronically settle payment for goods or services.” (Source)

And with the creation of the automated clearing house network and recurring payments, ebilling really took off. According to this study, 73% of respondents used electronic invoicing to some degree in 2012, a 14% increase from 2011.

And although legacy corporations and governments have been notoriously slow to adopt ebilling, the U.S. treasury estimated that implementing invoicing across the entire government could cut costs by 50% (Source).

The players involved in a modern electronic billing solution

Merchant

This is you! The business with internet access sending an electronic bill.

Customer

The person receiving the bill electronically.

Online gateway provider

This is often your merchant service provider (the business who equips you with everything you need to accept transactions), but you can stitch together your own system using specific online gateways. Online gateways are the mechanism or portal that facilitates these online transactions via a convenient webpage.

Types of e billing systems

Direct with the business

This is the most typical format where a business has their own system and sends it directly to the customer to pay.

Aggregator or credit card dashboard

This is when a customer pays in a business in person with a card but then settles that balance later online through a dashboard.

Self-billing or open invoice

This is when the business has an option to be paid directly either for charity or for a business agreement where the customer determines the amount to be paid and does so proactively.

Confirm electronic receipt online but pay in cash

This is when a business partners with banks or online gateway providers to give an electronic reservation number or receipt to a customer, who then has a specific window of time to go to the partner bank in person, look up that reference number, and then pay the bank in cash. That bank then delivers that cash to the original partner.

The typical components of an e billing system

Invoice

This is the email or webpage that contains the payment amount, instructions, terms, purchase order number, due date, and a clear CTA to pay that connects to the online gateway.

Receipt

After an electronic purchase is completed, modern ebilling systems send a receipt with the unique order code confirmation along with any other necessary information (ticket downloads, etc.)

Payment Gateway

This is where the actual transaction takes place and is (again) usually provided by a merchant services provider like Tidal Commerce.

Sales Dashboard/Data

The best e billing systems combine all of this electronic communication and integrate with your existing accounting software / provide you with useful sales data.

Discover why merchants love Tidal Commerce’s ebilling system

Benefits of e billing

Cheaper

Packing paper invoices and manually inputting invoice data into computer systems is labor and resource intensive.

Better for the environment

E-billing dramatically reduces paper use in companies.

Faster payments and collections

E-billing options mean you don’t have to wait for payments to go through the mail — customers can be in minutes.

Better customer experience

Paying from the comfort of their own home or relying on the power of recurring payments to handle payments automatically is a much better customer experience.

Worldwide area of service

The internet opens the entire world to your business. As long as a customer has internet, you can sell to them.

Reduces errors

Having a system handle the bulk of the accounting and transaction process will reduce human errors and make your business more efficient.

Individualized customer data

When you combine ebilling systems with CRMs or other business dashboards that track lifetime customer value and buying preferences, your business can begin to utilize the immensely powerful marketing tactic of segmentation.

How ebilling should fit into your existing business model

Now that you know what ebilling is and why you should get it… where does all of this fit in? How should you properly use ebilling? How do you choose the right system?

Well… your focus should be two-fold:

You want to find an electronic billing system that is modern, well-designed, secure, and convenient for customers AND that ties directly into your sales/accounting data and equips your marketing and sales teams with the information they need to make smarter decisions.

In other words, don’t think about e-billing as solely a way to get your customers to pay. It is, but it can be much more than that if you set it up that way.

E-billing is simply a component in your machine, but one that should better the other parts of your business — and the key to that is data collection.

Your system should be generating automatic sales reports by store and geographical location. By product type and dollar amount. By user segments as determined by your CRM or business dashboard.

With this information in hand you improve your marketing efforts by:

  • Personalizing emails based on buying preferences
  • Personalizing ads based on timing and buying preferences
  • Understanding who your top buyers are and crafting your modeling efforts to find more people like them.

The point is… ebilling is nothing new, but that doesn’t mean the capacity of ebilling systems and how they interact with the rest of your business isn’t being innovated — it is, and that’s exactly what we’re doing at Tidal.

Discover how merchants save up to 35% on transaction fees while adopting a completley modern payment system with Tidal Commerce

How to get your own electronic bill system

Fortunately, with as widespread as online billing is, it’s quite easy. Virtually all merchant service providers either have their own system included in their offerings or partner with online gateway providers to give your business the ability to accept transactions online along with other normal services (physical payment terminals, merchant accounts, etc.).

We are devoted to simplifying the merchants services world into one central system that does everything simply and beautifully. We save you money and give your customers the best payment experience possible.

Here are some of the awesome things Tidal Commerce merchants get to use day in and day out:

Robust business analytics

You can source payment reports from as many locations as you have and hone in on single restaurants to determine which meals and deals are having the biggest impact. Plus you can access real-time data anytime, anywhere.

Fast deposits

We work fast at Tidal Commerce. Get your deposits in as little as 2 days, and you get the analytics instantly — allowing you to put that money where you need it as soon as possible.

Growth-minded service

From Gina’s diner to global restaurant empires, we’re here to help you grow day in and day out. Let us become your payment advocate — always keeping an eye out for ways to save you money and improve your business.

Merchants can save 35% on transaction fees when switching to Tidal Commerce.

We’re here to dish out the savings. Merchants who switch to Tidal save an average of 35% on their transactions, and we’ll even show you what you can save upfront for free.

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