In this increasingly digitalized world, it seems that there are always new programs and platforms advertised to make our lives easier. Some actually do so, while others do not. In this article, we will discuss a digital advance that really can save you a lot of time and unnecessary stress (especially if you are a small business owner): bill pay services.
Some of you may already be familiar with bill pay services (sometimes known simply as “billpay”). Some may have started to dabble but have not yet fully adopted it as a way to make all of your or your company’s bill payments. Others may have never heard of it before.
This article will provide information for all of those perspectives:
- we will explain what online bill pay is
- discuss how it works and how to employ its services, and
- lead you through a review of its advantages and disadvantages
Most people — even if they are familiar with the concept of bill pay and use it for one or two bills — are not aware of the full spectrum of services available.
What Are Bill Pay Services?
Bill pay services can vary slightly in what exactly they offer, and certainly in how the user chooses to take advantage of their offerings, but at their core, they are a way for customers to pay their bills online — through an app or a website. This eliminates the need to write and mail out a check to pay your bills. Almost all banks and credit unions offer bill pay services, as well as several third-party companies.
Not only do bill pay services eliminate the need to deal with paper bills, but they also allow you to pay your bills automatically. That way you don’t have to remember to go through and send the money to each entity every month, and they often offer the option to put all of your bills in one place.
This means that you can visit one website or app to look at and pay all of your bills, which is helpful when you want an organized overview of your total expenses.
Personal Bill Pay Service & Small Businesses
As you can imagine, bill pay services can be particularly useful for small business owners, or anyone dealing with an atypical amount of bills. Taking advantage of billpay sites is one of the best ways to increase your efficiency and organization in paying your bills. It feels good to eliminate the possibility of missing a payment.
One of the best things about bill pay services is that they are — almost without exception — very user-friendly. Generally, the process for using bill pay is very similar across different platforms. If you are using billpay through your bank or other financial institution, they will likely offer you an option to sign up for automatic payments, and then you will just have a few decisions to make.
Where is Your Money Coming From?
First, you’ll have to choose whether you want the money that goes towards your bills to come out of savings accounts or checking accounts and provide those account numbers.
How Many Bills Will You Automate?
Then, you’ll decide how many bills you want to schedule payments for through the bill pay service. Some users want to pay all of their bills automatically, some only want to pay one or two — sometimes if a bill tends to vary greatly month to month people tend not to want it to automatically come out of their accounts.
What Is Your Billpay Schedule?
The next step is to decide if you want to schedule online payments to come out automatically, or if you want to manually make one-time payments as necessary.
Bill pay services will always have the option to notify you (usually via text or email) when a payment has been made through your account. You can even choose to be notified when a payment due date is coming up. Having all of this information online can also be a great way to keep track of your payments — bill pay sites allow you to view your payment history and even search for specific payments within their records.
Factors to Consider
This leads us to some of the advantages and disadvantages of bill pay services. So far we have mostly discussed the positives, but it is important to look at bill pay from all angles and review some of its potential drawbacks as well.
Check Your Payment Schedules
One of the biggest potential negatives to bill pay services is that just because you are ready to make online payments, this does not necessarily mean that your payee is ready to accept them. This tends to be especially prevalent among landlords and other small businesses. If it is the case that one of your monthly bills cannot be submitted easily online, you will need to do some problem-solving to figure out the best way to complete the transaction.
Usually, your bank will be able to send a check or money order to your payee, but you will have to schedule that payment several days in advance.
Beware of the Overdraft
The other big potential issue to keep in mind if you’re using bill pay to automatically schedule your payments is that it can result in account overdraws. If a payment amount is higher than expected, or for whatever reason your bank account balance is lower than expected, bill pay will not pick up on the difference and could leave you with unexpected — and undesired — overdraft fees.
Some banks protect against overdraft fees, so if you are considering using automatic bill pay it’s a good idea to research your financial institution’s overdraft policy. Also, be very aware of the typical amount you have in your account versus the typical amount of your bills.
Check On Your Security
Another aspect of billpay that tends to make users nervous is the security factor. People — especially business owners with a lot of confidential accounts and financial information at stake — are sometimes worried that online banking (and thus paying their bills online) is less secure than the traditional version of sending a paper check through the mail.
It is entirely reasonable to be worried about hackers and other security threats and to be very vigilant about your own security precautions. However, if you are worried about this aspect of online bill pay, you should rest assured that online banking is extremely common now, and the financial institutions facilitating these transactions have taken extreme measures to keep your information secure. Of course, anything is possible, but it is certainly not probable.
Say Yes to Bill Pay Services!
Now let’s move into some of the advantages of billpay. We have touched on a few reasons why people choose to use automatic billing in their personal and professional lives but haven’t explicitly listed the pros of bill pay services yet.
There are four major advantages to bill pay services.
#1: Convenience
The most obvious is its convenience. All you have to do is tell your bank (or whichever financial institution you use for billpay) who you want to pay when, and they’ll do it for you every month. This eliminates the need to keep track of all of your bills and their due dates.
#2: Automatic Recordkeeping
Another great thing about automatic bill pay is that it keeps a record of all of your transactions. Although many people who choose to pay bills manually via a paper trail keep their own records as well, these records are prone to getting lost, damaged, or even having inaccurate or missing information.
If you are paying your bills through an online financial institution, however, these websites are designed to have strong and secure databases. They have advanced methods of keeping track of all your payments and leave you an organized paper trail. This can be extremely helpful if you need to dispute a transaction or reference a certain bill.
#3: Keep Payments On-Time
Bill pay also helps you avoid being late on paying your bills. Human error is real, and life circumstances are real, and unfortunately, these two factors sometimes result in missing a payment.
With automatic bill pay though, you don’t have to remember to make a payment every month. The computer does it for you. This means that (although you risk potential overdraft fees) you can rest assured that you will not be late on any payments.
#4: Eco-Forward Money Management
And lastly, bill pay is better for the environment. These days, almost every industry is taking strides towards becoming more environmentally friendly and reducing its carbon footprint. Banking and finance are no different.
The amount of paper used up by sending checks and keeping physical records is enormous, and paying your bills online can significantly reduce that.
The Saddock Advisory Team Can Help
We are here to discuss the best options for you and your business, and help you explore bill pay services.
Get in touch with us here to find out how you or your business can take the next steps.
Sources:
https://www.nerdwallet.com/article/
