Executives view billing as a utility, not a strategic function

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?

Consumer Bill Payers Want Incentives To Go Electronic

Posted by Mark Brousseau

Consumers pay a lot of bills, and they pay those bills in myriad combinations of channels and methods. Consumers’ bill pay behavior isn’t a trivial matter—changes in behavior can result in millions of dollars of additional or lost revenue, or millions of dollars in cost savings.

Despite the increasing popularity of the Internet and the emergence of the mobile channel as a way to transact and interact, checks sent through the mail remain the most prevalent method for paying bills in the United States.

Aite Group says the number of bill payments made through the mail will fall just short of 5 billion for 2010, accounting for about one-third of all payments made, whereas payments made at a biller site—including recurring and mobile payments—will account for 23% of all bills paid in 2010.

Looking to the future, however, consumers’ bill pay behavior is very likely to change, Aite Group predicts. Roughly four in 10 consumers say they would change how they pay their bills if they received rewards for paying with a debit or credit card, or received a cash incentive for changing their behavior, the research and advisory firm reports. In addition, the rapid adoption of smartphones will help drive bill pay behavior change over the next three years.

“There’s an emerging segment of consumers—which we call Smartphonatics—that will lead to an increase in the use of the online and mobile channels for paying bills,” says Ron Shevlin, senior analyst with Aite Group. “These young and affluent consumers are chomping at the bit to use their smartphones, and are very likely to change how they pay bills if it becomes easier to do so via mobile. The growth of biller-direct over consolidator, coupled with the projected growth in mobile payments, means an opportunity for bill pay solutions providers to create an industry-leading mobile platform.”

What are you seeing?

95% of Utility Bills Still Sent Through Mail

Posted by Mark Brousseau

Utilities continue to incur high costs due to distributing 95 percent of their bills through the mail, according to Chartwell's survey of 94 utilities. Bills sent through the mail are more expensive than bills delivered electronically.

Some utilities have seen success in decreasing the percent of customers receiving paper bills. One utility with more than 300,000 customers enrolled about 20 percent of its customers in paperless billing through promotions on almost all of the material produced by the utility. This utility also incentivized employees to enroll customers. Another utility company, Arizona Public Service, donated $1 to the Tree Research and Educational Endowment every time one of their customers signed up for paperless billing over a three month time span. Arizona Public Service was able to switch almost 17,000 customers from high-cost paper bills to low-cost electronic bills.

While consumer marketing has been successful in decreasing paper bills mailed out, many utilities are looking to cut costs by delivering bills through secure email. In an effort to reduce the costs of distributing bills, 40 percent of utilities are planning to offer or are considering delivering bills through secure email, Chartwell says.