By now you’ve heard the mantra: Get rid of paper in your practice. After all, this labor reduction gives your firm the time and opportunity to explore new services, pricing structures and prospecting strategies. Right?
According to a new survey from Bill.com, most accounting professionals say they're all in. In fact, 63 percent of the respondents said they like the idea of moving to a paperless bill pay environment, while 40 percent said that paperless bill pay would make them feel more efficient, and 20 percent said it would make them feel more organized.
And for the firms that said they would feel efficient, 70 percent indicated that they wish all clients would completely eliminate paper checks from the bill pay process
The 2016 Accounting Trends Client Bill Payment Survey collected the responses of more than 500 accounting and bookkeeping professionals from all firm sizes on the topic of client bill payment services. The answers, captured in July of 2016, covered areas such as what methods firms are using for payment, how they would like to pay, concerns about AP and paper and more.
Getting Rid of Paper Makes Me Feel …
The data clearly shows the accounting community has an openness and preference for paperless bill pay. When asked why they wish to phase out paper checks, comments covered everything from increased efficiency, collaboration, convenience and security. They included:
- “Electronic payment is more secure and more efficient.”
- “It would simplify the bookkeeping process.”
- “Checks are not secure and can be lost.”
- “Don’t need to travel – remote processing possible.”
Security for the AP process, however, remains a concern – especially for larger firms. A majority of large firms indicated that paper related to AP creates a serious risk and 94 percent doubted the appropriate separation of duties exists for clients.
Nearly half of the large firms that responded said they have had clients victimized by bill payment fraud (thanks to opportunities to steal check stock or access financial paperwork). More and more, accountants are realizing that electronic bill payment – which can offer security measures such as restricted access, automated workflows and enforced separation of duties – can protect firms from AP-related risks.
Accounting professionals not only agreed with the idea of eliminating paper from the bill pay process, they are also making progress toward that goal. More specifically:
- 33 percent of the respondents report that half or more of their clients pay bills electronically.
- 15 percent said that three-quarters or more of their clients pay bills electronically.
- It’s clear that firms are making progress toward enacting paperless bill payment environments.
Let’s Talk Time – Paper Bill Payment vs. Electronic Bill Payment
How much time does bill pay take when you rely on paper checks? The survey had some interesting numbers that highlight a strong correlation between paper checks and the amount of time dedicated to bill payment by practitioners.
Almost one-quarter of the respondents that use handwritten checks spend up to 10 hours a month per client on bill payment. An additional 6 percent see that number increase substantially, with an average of 11-20 hours per month per client on bill payment.
On the whole, about 30 percent of all accounting professionals using handwritten checks spend multiple hours per client each month on bill payment alone. Consider a firm using handwritten checks with 10 clients. At 10 hours per client per month, they take 100 labor hours a month to handle bill payment. That’s a substantial investment, both for time and expense.
Now, let’s consider computer-printed checks. Seventy-three percent of the respondents said that they use computer-printed checks for bill payments. Does that lead to time savings?
Overall, 30 percent of survey respondents using computer-printed checks report that they spend between 4-10 hours per month per client on bill payment. For large firms that use computer-printed checks, they spend up to 10 hours a month per client on bill payment.
Since many of these firms indicated they have 150+ clients, the monthly time allotted to support bill pay could hit up to 600 hours a month. In other words, you’re saving time by not writing out each check, but you still must get the check signed, and then stuff, stamp, address, mail and reconcile it.
From these figures, these firms have a significant opportunity to cut hours and costs by eliminating paper from bill payment. Let’s compare the time accounting professionals spent on bill payment when they used electronic payments.
When firms rely on cloud-based bill payment technology, the survey shows a decrease in time spent on it. Forty-nine percent of the respondents who use cloud technology indicate that it takes between 1 and 3 hours (or less) per client each month to handle bill payment.
A full 8 percent said they spend less than an hour per client each month. For firms that have a majority (76-100 percent) of their clients pay electronically, 30 percent spend less than an hour a month on each client’s bill payment process, and 40 percent spend only 1-3 hours.
For the above-mentioned firms spending 10 or more hours a month per client on bill payment, jettisoning paper checks for cloud-based bill payment technology could slash their bill payment time by 70-90 percent.
So ... What is the Payoff?
Introducing more efficiencies paves the way to grow practices without adding headcount through options such as new services and pricing. You can work smarter – not harder.
If you can accomplish a task in half the time you normally do, suddenly you have a larger bandwidth to devote to revenue-enhancing accomplishments. The survey clearly demonstrates that firms are saving time and labor by embracing electronic bill payment.
So whether that translates into improvements with revenue, profitability or work-life balance, it’s worth the time to invest in automation with cloud and mobile solutions.
We all know, time is money and the business of accounting is becoming more competitive. Talk to your peers about their experiences with electronic bill payment, request recommendations or attend webinars to gather more information about how your firm can adopt paperless bill payment today.
Feel free to click on the survey for more findings and of course, leave your feedback on your own experiences and opinions on paperless bill payment below.