6 Reasons Why You Need to Pay Your Bills On Time

Why is it essential for a large business to pay its bills on time?

There are six key reasons businesses should ensure that their bills are paid on time, and they are all very important to the bottom line.

Depending on your Utility retailer, the key reasons to pay on time are:

1. Missed ‘pay on time’ discounts – some retailers offer a percentage discount for bills paid on time.  These savings will be lost if an invoice/s is paid late.
2. Late payment fees – where bills are not paid on or before the due date, retailers often apply a late payment fee. In addition to these fees, some retailers may also apply interest to late payments.  For multisite businesses making hundreds of monthly payments, this can soon add up to thousands of dollars.
3. Disconnections – If an account is unpaid for some time, the retailer can enact a disconnection of the supply.  This is highly disruptive for a site’s operations and can cause loss of production or sales. In the event of a disconnection occurring, reconnections can often be delayed until outstanding balances are cleared and reconnection fees are often applied too.
4. Reallocation of account credits to offset debits – retailers have been known to move account credits within a client’s portfolio in order to ease debts elsewhere.  This can create a complex paper trail and wasted time that a Accounts Payable resource will need to then manage.
5. Calls chasing debt – where an unpaid account balance arises, retailers will be contacting the account lead (which may not always be the responsible Accounts Payable resource) by phone, text, and email chasing for payments to be made.  When you have hundreds of accounts, these are calls that can cause considerable downtime for your staff.
6. Credit risk premium – consistent late payments may result in retailers applying a credit risk premium to your energy rates at contract renewal.  In worst-case scenarios, retailers can even decline to bid on an RFP or build in extra dollars into your contract to cover any likelihood of default.

What challenges may be preventing you from always paying your bills on time?

Businesses often struggle to pay utility bills on time for a number of reasons:

• Varied retailer billing cycles across the entire energy portfolio.
• Bills being provided in a variety of billing formats such as native PDFs, scanned bills, paper bills, EDI, and spreadsheets.
• Delays in bills being approved for payment due to complex processes, data, and multiple line items.
• Accounts Payable scheduled payment runs that do not sync with retailer payment terms.
• Manual entry and manipulation of payment data are required to upload into finance enterprise resource planning (ERP) systems.
• Labour intensive payment processes and time-stretched finance employees.
• A complicated, manual reconciliations process.

Many multisite businesses have benefited from the automation of the entire Bill Management process.  Bill Identity provides a complete end-to-end Utility Bill Management solution that includes collection, validation, issue identification & resolution all the way through to bill payment and remittance.

“A fifth of AP leaders say that the inability to see what is happening across the end-to-end bill management payment process is a key priority for them to address”

Are you considering outsourcing your entire utility bill management, including payment and remittance?

When it comes to processing utility bills, accounts payable teams certainly have their work cut out.  Partnering with the right provider to automate your Utility Bill Management will free up your finance team to find additional ways to drive further bottom-line improvements.

What are the benefits of outsourcing your bill payment to Bid?

• Customers only have to pay one vendor (each week) which reduces time, effort across multiple personnel and business units.
• Bid sends remittance details to all retailers to verify payments made (that reduces the need to reconcile).
• We can manage all utility retailer payment queries, freeing you up to focus on higher-value tasks.
• We are experienced in utility bill payments & remittance services, already providing these to many of our large complex clients.

Let us manage your entire utility bill management, bill payment, and remittance process so you can focus on your core business rather than processing hundreds or thousands of utility bills annually.

Find out more about our Utility Bill Management and how it can support your bill payment & remittance services too.

Contact us here.  Already a Bid customer?  Reach out to your Account Manager for more information.