Posted by Mark Brousseau
Despite its critical role in revenue collection and corporate cash flow, billing has apparently become such a systematic function that it is no longer viewed as strategic – even by billing executives themselves.
In fact, according to a survey from Billtrust, fully two-thirds (67 percent) of billing related executives view billing as a utility, while only a third of those polled (33 percent) see billing as strategic. And yet, one out of every four respondents (25 percent) is not confident their bills will get paid on time. The survey points to the growing number of businesses who are missing opportunities for cost savings, accelerated cash flow, customer relationship building and even revenue generation in the billing process.
Billtrust surveyed nearly 40 executives associated with the billing function across a spectrum of North American businesses. The lack of recognition of billing’s role in customer relationships was apparent, as nearly two thirds of those polled (64 percent) said that billing either hurts, or has no impact, on customer service. At the same time, 59 percent of respondents believe their current billing process supports the building of customer relationships.
When asked their highest billing priority, 81 percent said accuracy and 19 percent said timeliness. None of the respondents pointed to cost savings as their top priority. The findings document conflicting perceptions on the role of billing and confusion on the best methods and outcomes related to the billing function.
“When it comes to billing, most businesses focus on the basics,” said Flint Lane, CEO of Billtrust. “Many of the organizations we speak with are unaware of the opportunities that exist in the billing process and don’t even know when their billing is unhealthy. We have seen the symptoms so often that we named the syndrome Chronic Billing Disorder.”
“With a more strategic approach to billing, companies can create cost savings, build better customer relationships and drive revenue growth,” said Lane.
The survey also revealed several other interesting findings on various aspects of the billing process:
... the overwhelming majority of those polled (84 percent) say their bills are generally delivered on-time or ahead of schedule, while 16 percent say their bills are generally delivered late.
... nearly a third of those polled (31 percent) do not feel their bills match the quality standards of their brand.
... nearly 1 in 5 billing executives say they don’t believe their current billing processes have a positive impact on cash flow.
What do you think?
Showing posts with label billing. Show all posts
Showing posts with label billing. Show all posts
Thursday, March 10, 2011
Thursday, February 17, 2011
Expect exponential growth for EIPP in 2011
By Michael Lane of Data Impact
In 2010, only 57 percent of business-to-business (B2B) payments were made by check, which is down from 63 percent in 2009 and 74 percent in 2008 (according to the Association for Finance Professionals 2010 Electronic Payment Survey).
This steady decline indicates that businesses are not only looking for, but are finding a more streamlined approach for managing the financial supply chain. As companies become more attuned to the needs of the B2B transaction set, 2011 is expected to be a record breaking year for electronic invoice presentment and payment (EIPP) growth.
Solution providers now recognize that traditional business to consumer models for electronic invoicing and payment cannot accommodate the complex needs of a B2B environment. As a result, the leaders in the EIPP space are providing more robust supporting information at the invoice and payment levels. Documents necessary to support the invoice review and approval process are made available within the platform. Invoice uploads into the customer’s accounts payable platform allow for cost savings and process efficiencies which fosters adoption. More importantly, the lack of remittance details and complexity of reconciliation have been addressed by decoupling the ACH and accounts receivable file information. Auto reconciliation can be achieved with a separate remittance file that is mapped directly into the billing parties accounts receivable platform.
With the past barriers removed, companies of all sizes will more aggressively pursue EIPP platforms in 2011 in order to drive cost savings, accelerate cash and confidently control receivables.
What do you think?
In 2010, only 57 percent of business-to-business (B2B) payments were made by check, which is down from 63 percent in 2009 and 74 percent in 2008 (according to the Association for Finance Professionals 2010 Electronic Payment Survey).
This steady decline indicates that businesses are not only looking for, but are finding a more streamlined approach for managing the financial supply chain. As companies become more attuned to the needs of the B2B transaction set, 2011 is expected to be a record breaking year for electronic invoice presentment and payment (EIPP) growth.
Solution providers now recognize that traditional business to consumer models for electronic invoicing and payment cannot accommodate the complex needs of a B2B environment. As a result, the leaders in the EIPP space are providing more robust supporting information at the invoice and payment levels. Documents necessary to support the invoice review and approval process are made available within the platform. Invoice uploads into the customer’s accounts payable platform allow for cost savings and process efficiencies which fosters adoption. More importantly, the lack of remittance details and complexity of reconciliation have been addressed by decoupling the ACH and accounts receivable file information. Auto reconciliation can be achieved with a separate remittance file that is mapped directly into the billing parties accounts receivable platform.
With the past barriers removed, companies of all sizes will more aggressively pursue EIPP platforms in 2011 in order to drive cost savings, accelerate cash and confidently control receivables.
What do you think?
Will Facebook replace the United States Postal Service?
By Flint Lane of Billtrust
Facebook and the United States Postal Service (USPS) are two organizations that have virtually nothing in common. One is a profitable enterprise that Hollywood is making movies about. The other is a government-run organization losing billions of dollars per year. What, if anything, could they have in common?
I've been thinking a lot lately about what's going to happen with the USPS. It's clear that their business model is broken and without an act of Congress, literally, they'll just continue to lose billions each year. I don't blame the folks that run the USPS, they work hard, but they're stuck with a business model that just doesn't work.
When I do the Billtrust sales pitch for electronic billing, it usually goes something like this: "How much sense does it make for a biller to take an electronic billing feed, print it on paper, put it in an envelope, mail it to me so I can then attach a check and mail it back?" Sounds pretty stupid, right? Well, why are the majority of bills still delivered via the USPS? The answer is actually pretty simple; it's still the only mechanism that can reliably reach everybody.
Below I lay out what a new "electronic post office" has to have in order to replace the USPS and why I think Facebook could easily position themselves for this.
1. Universal Deliverability - Facebook claims 150 millions active US users today and growing rapidly. While certainly not universal, they're certainly getting there with the ability to reach the majority of Americans.
2. Effective Communication Platform - Facebook falls short here quite frankly. Posting a status update is interesting and a great way to stay in touch with friends, but Facebook, in my opinion, has fallen on their face as a communication tool. What Facebook really needs here is a GMail like email interface so that people/businesses could send stuff to your @facebook.com address. Now this certainly would introduce enormous spamming opportunities. Facebook could impose some kind of insignificant email tariff to prevent rampant abuse. I've blogged about this in the past (here). I know most people think they get a lot of paper junk mail, but there is actually an effective tariff in place to limit this, it's called postage. I wouldn't mind receiving some junk email if they went through a system that actually had some controls in place. Charging $0.001 per email wouldn't be unreasonable and would keep out the blatant spammers.
3. Privacy - I don't get myself too worked up about my online privacy because I think the measures that most companies take are far more effective than the offline world. However, there are certainly opportunities for abuse here. I would suggest taking a portion of the tariffs collected from above to pay a third party to monitor privacy on a regular basis.
4. Payments - The majority of mail that people get, that is of any importance, are bills. That's because they require the user to take an action - return a payment. Facebook doesn't have this today but this is not a big effort.
Other have tried to become the universal mailbox. My first company Paytrust did this for bills. Zumbox and EarthClassMail are trying to do this for all other forms of mail. But all three suffer from the chicken and the egg problem. Which is to say that until they have enough users, billers and other mailers don't want to bother enabling electronic delivery to them. And users won't sign up, until they can get a majority of their mail through the channel.
That's why I think Facebook, if they want, is well positioned to do this because they already have the user base. Economically I think it would be a slamdunk. Who else could do this? Maybe Google with GMail but I like Facebook's chances better.
Facebook and the United States Postal Service (USPS) are two organizations that have virtually nothing in common. One is a profitable enterprise that Hollywood is making movies about. The other is a government-run organization losing billions of dollars per year. What, if anything, could they have in common?
I've been thinking a lot lately about what's going to happen with the USPS. It's clear that their business model is broken and without an act of Congress, literally, they'll just continue to lose billions each year. I don't blame the folks that run the USPS, they work hard, but they're stuck with a business model that just doesn't work.
When I do the Billtrust sales pitch for electronic billing, it usually goes something like this: "How much sense does it make for a biller to take an electronic billing feed, print it on paper, put it in an envelope, mail it to me so I can then attach a check and mail it back?" Sounds pretty stupid, right? Well, why are the majority of bills still delivered via the USPS? The answer is actually pretty simple; it's still the only mechanism that can reliably reach everybody.
Below I lay out what a new "electronic post office" has to have in order to replace the USPS and why I think Facebook could easily position themselves for this.
1. Universal Deliverability - Facebook claims 150 millions active US users today and growing rapidly. While certainly not universal, they're certainly getting there with the ability to reach the majority of Americans.
2. Effective Communication Platform - Facebook falls short here quite frankly. Posting a status update is interesting and a great way to stay in touch with friends, but Facebook, in my opinion, has fallen on their face as a communication tool. What Facebook really needs here is a GMail like email interface so that people/businesses could send stuff to your @facebook.com address. Now this certainly would introduce enormous spamming opportunities. Facebook could impose some kind of insignificant email tariff to prevent rampant abuse. I've blogged about this in the past (here). I know most people think they get a lot of paper junk mail, but there is actually an effective tariff in place to limit this, it's called postage. I wouldn't mind receiving some junk email if they went through a system that actually had some controls in place. Charging $0.001 per email wouldn't be unreasonable and would keep out the blatant spammers.
3. Privacy - I don't get myself too worked up about my online privacy because I think the measures that most companies take are far more effective than the offline world. However, there are certainly opportunities for abuse here. I would suggest taking a portion of the tariffs collected from above to pay a third party to monitor privacy on a regular basis.
4. Payments - The majority of mail that people get, that is of any importance, are bills. That's because they require the user to take an action - return a payment. Facebook doesn't have this today but this is not a big effort.
Other have tried to become the universal mailbox. My first company Paytrust did this for bills. Zumbox and EarthClassMail are trying to do this for all other forms of mail. But all three suffer from the chicken and the egg problem. Which is to say that until they have enough users, billers and other mailers don't want to bother enabling electronic delivery to them. And users won't sign up, until they can get a majority of their mail through the channel.
That's why I think Facebook, if they want, is well positioned to do this because they already have the user base. Economically I think it would be a slamdunk. Who else could do this? Maybe Google with GMail but I like Facebook's chances better.
Saturday, February 5, 2011
Are we approaching the "tipping point" for ebill usage?
Posted by Mark Brousseau
When will eBills be more widely used than traditional paper bills? A recent study suggests it might only be five years down the road.
The study conducted by NACHA’s Council for Electronic Billing and Payment (CEBP) and PayItGreen suggests that eBilling – or the electronic delivery of a bill to a customer – is gaining momentum across business industries with more billers expected to come online in 2011 and 2012. The NACHA CEBP and PayItGreen study, completed by Blueflame Consulting in January 2011, quantified the size of the eBill market, indicating that a total of 5.1 billion eBills were delivered in 2010 alone. However, some consumers are moving to adopt eBills more slowly than anticipated.
“After easily converting the ‘early adopters’ to eBills, billers are realizing that the second and third tiers of consumers will take more time to convince,” said Ed Bachelder, director of research for Blueflame Consulting. “However, billers across a broadening range of markets and sizes see eBill adoption as an important program for their companies, and have shown commitment to continuing to try to convert their customers.”
Nine of 10 of the companies surveyed rate eBill adoption to be a significant opportunity for their organizations. Cost-savings serves as a major driver for companies, with projected savings falling between 40 and 50 cents per bill. Another motivating factor, billers also said eBill customers are more satisfied customers and are easier to retain. Collectively, participants in the study distribute 735 million bills in a typical month, which is approximately 25 percent of all bills nationwide.
“eBills have not reached their full potential, but they’re gaining momentum,” said Janet O. Estep, president and CEO of NACHA — The Electronic Payments Association. “With companies’ long-term commitment to converting their customers to electronic bill presentment, we see adoption gaining momentum.”
Of those surveyed, universities had the most successful eBilling programs by far. Most universities can mandate eBilling for their students or use a customer opt-out approach rather than an opt-in approach.
“Most billers ask their customers to opt-in to the eBilling program,” said Bachelder. “Companies could increase their eBill participation dramatically by changing their new customer enrollment to an opt-out approach. Our study suggests that only 10 percent of customers who have Internet access would choose to opt-out once they experienced eBilling. Study participants identified one obstacle to eBilling is that the sign-up process is often too time-consuming for customers. An opt-out program would simplify that step.”
Participants in the study agree that more customer education is needed about how eBilling works, the security involved, and how significant paper reduction is to improving the environment.
“Once customers truly understand eBilling, they respond positively for a number of reasons,” said Estep. “Convenience is key, and environmental messaging continues to be a supporting motivator for eBill adoption.”
What do you think?
When will eBills be more widely used than traditional paper bills? A recent study suggests it might only be five years down the road.
The study conducted by NACHA’s Council for Electronic Billing and Payment (CEBP) and PayItGreen suggests that eBilling – or the electronic delivery of a bill to a customer – is gaining momentum across business industries with more billers expected to come online in 2011 and 2012. The NACHA CEBP and PayItGreen study, completed by Blueflame Consulting in January 2011, quantified the size of the eBill market, indicating that a total of 5.1 billion eBills were delivered in 2010 alone. However, some consumers are moving to adopt eBills more slowly than anticipated.
“After easily converting the ‘early adopters’ to eBills, billers are realizing that the second and third tiers of consumers will take more time to convince,” said Ed Bachelder, director of research for Blueflame Consulting. “However, billers across a broadening range of markets and sizes see eBill adoption as an important program for their companies, and have shown commitment to continuing to try to convert their customers.”
Nine of 10 of the companies surveyed rate eBill adoption to be a significant opportunity for their organizations. Cost-savings serves as a major driver for companies, with projected savings falling between 40 and 50 cents per bill. Another motivating factor, billers also said eBill customers are more satisfied customers and are easier to retain. Collectively, participants in the study distribute 735 million bills in a typical month, which is approximately 25 percent of all bills nationwide.
“eBills have not reached their full potential, but they’re gaining momentum,” said Janet O. Estep, president and CEO of NACHA — The Electronic Payments Association. “With companies’ long-term commitment to converting their customers to electronic bill presentment, we see adoption gaining momentum.”
Of those surveyed, universities had the most successful eBilling programs by far. Most universities can mandate eBilling for their students or use a customer opt-out approach rather than an opt-in approach.
“Most billers ask their customers to opt-in to the eBilling program,” said Bachelder. “Companies could increase their eBill participation dramatically by changing their new customer enrollment to an opt-out approach. Our study suggests that only 10 percent of customers who have Internet access would choose to opt-out once they experienced eBilling. Study participants identified one obstacle to eBilling is that the sign-up process is often too time-consuming for customers. An opt-out program would simplify that step.”
Participants in the study agree that more customer education is needed about how eBilling works, the security involved, and how significant paper reduction is to improving the environment.
“Once customers truly understand eBilling, they respond positively for a number of reasons,” said Estep. “Convenience is key, and environmental messaging continues to be a supporting motivator for eBill adoption.”
What do you think?
Thursday, October 1, 2009
ERM ROI
Posted by Mark Brousseau
With widespread acceptance that deficiency in risk management was a leading contributor to the credit crisis, these could be happy days for Enterprise Risk Management (ERM) and its advocates. With that new-found popularity will come accountability though; a request that ERM proves its real worth. Ascribing a quantifiable value to ERM may be difficult – but not impossible as Mike Nolan of KPMG’s Advisory practice explains.
As a concept, Enterprise Risk Management has now been with us for some time yet the concerns over how to quantify its effectiveness refuse to disappear.
Many people have become accustomed to judging ERM in qualitative, ‘softer’ terms. In this regard, it’s hard to argue against its effectiveness, resulting as it does in enhanced risk identification and prioritization, a common risk language, improved risk and controls optimization, better risk monitoring and reporting as well as contributing to strengthening risk governance and culture.
However, in today’s currently cost-obsessed environment, assessment against intangible KPIs is unlikely to satisfy those business leaders intent on gauging exactly what the return on investment is; what value their current — or proposed — ERM program generates.
As more companies consider implementing ERM as a way of avoiding the risk management failures which precipitated the current crisis, the good news is that I believe ERM is quantifiable.Such quantification may not be easy; there’s no single formula and the results may not even be perfect — but surely this is preferable to the insistence that ERM can only be measured qualitatively. Such a reassurance might just convince a few more skeptics to head down the ERM route.
If you think about what ERM delivers, there are actually plenty of quantifiable outputs; decreased variability in financial results for example, as well as reduced hedging, insurance and capital costs. These equate directly to improved cash flow which, when coupled with a reduced discount rate (arising from reduced earnings volatility and an improved reputation within the investment community), results in enhanced company value. The metrics are there; it’s just a question of turning them into a final assessment which quantifies that all-important return on investment.
Let’s consider those metrics more closely, starting with capital costs first. With rating agencies paying increasing attention to companies’ ERM frameworks, deficiencies or over-performance in this area can be equated to a quantifiable impact on a company’s ability to access capital and on the cost of capital. Secondly, hard cost savings can be delivered by an ERM program which streamlines existing risk efforts and highlights redundant and inefficient risk activities (e.g. identification / assessment, aggregation and validation processes). Again, another quantifiable metric.
Insurance and hedging costs can be the most tangible cost elements in managing specific risks. ERM can help to optimize and reduce these costs by more clearly identifying underlying risk exposures, existing offsets and potential redundancies and inefficiencies.
Estimating earnings variability may be a complex task but can feasibly be undertaken both before and after ERM risk mitigation activities in order to demonstrate the impact and value of the ERM program.
Harder to quantify are the investment opportunities which can arise from ERM implementation but this does not mean the potential ‘up-side’ of ERM should simply be ignored. ERM enables companies to make smarter, proactive decisions, based on a better understanding of their current risk profile and their appetite for taking onboard more risk in pursuit of competitive advantage.
ERM is about optimizing risk in accordance with your risk tolerances and setting limits; not simply minimizing risk. Applying a risk lens and risk metrics to a business opportunity, in addition to the growth metric analysis, is likely to result in improved investment decisions. ERM can assist in identifying opportunistic areas of your business that would benefit from investment.
When thought of in these terms, the value of ERM looks far more quantifiable than has often been perceived. There is no simple formula for generating that final value but it should be an aggregate of performance in the areas mentioned above.
For too long, ERM has been considered solely in compliance terms, perceived similarly to existing internal audit, legal, environmental and finance compliance activities. Its presence was designed to assuage risk concerns from external stakeholders, directors and ratings agencies alike. It should now be seen in a more proactive light.
The credit crisis has refocused attention on to this area of business. ERM’s ‘standing’ in the risk world may have gone up but, with all expenditure now scrutinized down to the last dollar, it will have to properly prove its worth; something which it has traditionally struggled to do.
Thankfully, it may not prove as difficult a task as some would have us believe.
What do you think? Post your comments below.
With widespread acceptance that deficiency in risk management was a leading contributor to the credit crisis, these could be happy days for Enterprise Risk Management (ERM) and its advocates. With that new-found popularity will come accountability though; a request that ERM proves its real worth. Ascribing a quantifiable value to ERM may be difficult – but not impossible as Mike Nolan of KPMG’s Advisory practice explains.
As a concept, Enterprise Risk Management has now been with us for some time yet the concerns over how to quantify its effectiveness refuse to disappear.
Many people have become accustomed to judging ERM in qualitative, ‘softer’ terms. In this regard, it’s hard to argue against its effectiveness, resulting as it does in enhanced risk identification and prioritization, a common risk language, improved risk and controls optimization, better risk monitoring and reporting as well as contributing to strengthening risk governance and culture.
However, in today’s currently cost-obsessed environment, assessment against intangible KPIs is unlikely to satisfy those business leaders intent on gauging exactly what the return on investment is; what value their current — or proposed — ERM program generates.
As more companies consider implementing ERM as a way of avoiding the risk management failures which precipitated the current crisis, the good news is that I believe ERM is quantifiable.Such quantification may not be easy; there’s no single formula and the results may not even be perfect — but surely this is preferable to the insistence that ERM can only be measured qualitatively. Such a reassurance might just convince a few more skeptics to head down the ERM route.
If you think about what ERM delivers, there are actually plenty of quantifiable outputs; decreased variability in financial results for example, as well as reduced hedging, insurance and capital costs. These equate directly to improved cash flow which, when coupled with a reduced discount rate (arising from reduced earnings volatility and an improved reputation within the investment community), results in enhanced company value. The metrics are there; it’s just a question of turning them into a final assessment which quantifies that all-important return on investment.
Let’s consider those metrics more closely, starting with capital costs first. With rating agencies paying increasing attention to companies’ ERM frameworks, deficiencies or over-performance in this area can be equated to a quantifiable impact on a company’s ability to access capital and on the cost of capital. Secondly, hard cost savings can be delivered by an ERM program which streamlines existing risk efforts and highlights redundant and inefficient risk activities (e.g. identification / assessment, aggregation and validation processes). Again, another quantifiable metric.
Insurance and hedging costs can be the most tangible cost elements in managing specific risks. ERM can help to optimize and reduce these costs by more clearly identifying underlying risk exposures, existing offsets and potential redundancies and inefficiencies.
Estimating earnings variability may be a complex task but can feasibly be undertaken both before and after ERM risk mitigation activities in order to demonstrate the impact and value of the ERM program.
Harder to quantify are the investment opportunities which can arise from ERM implementation but this does not mean the potential ‘up-side’ of ERM should simply be ignored. ERM enables companies to make smarter, proactive decisions, based on a better understanding of their current risk profile and their appetite for taking onboard more risk in pursuit of competitive advantage.
ERM is about optimizing risk in accordance with your risk tolerances and setting limits; not simply minimizing risk. Applying a risk lens and risk metrics to a business opportunity, in addition to the growth metric analysis, is likely to result in improved investment decisions. ERM can assist in identifying opportunistic areas of your business that would benefit from investment.
When thought of in these terms, the value of ERM looks far more quantifiable than has often been perceived. There is no simple formula for generating that final value but it should be an aggregate of performance in the areas mentioned above.
For too long, ERM has been considered solely in compliance terms, perceived similarly to existing internal audit, legal, environmental and finance compliance activities. Its presence was designed to assuage risk concerns from external stakeholders, directors and ratings agencies alike. It should now be seen in a more proactive light.
The credit crisis has refocused attention on to this area of business. ERM’s ‘standing’ in the risk world may have gone up but, with all expenditure now scrutinized down to the last dollar, it will have to properly prove its worth; something which it has traditionally struggled to do.
Thankfully, it may not prove as difficult a task as some would have us believe.
What do you think? Post your comments below.
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