Presentment is the process used by a company or creditor to request payment from an individual. The request typically comes in the form of a bill or invoice that details what was purchased and what is owed.
Utility companies, lenders, insurers, and many other businesses regularly use presentment.
The Problem with Paper Bill Presentment
In the past, bill presentment would only come from a paper bill sent by a service provider. Now, customers can view their bills in various formats, including digital, pdf, or a hard copy.
With paper bill presentment, it is common for communication and payment between customers and vendors to get mixed up. For example, let’s say that your electricity bill is due on the 20th of the month. You write a check and mail it on the 18th (learn more about writing checks) However, the mail runs slow and the bill doesn’t arrive until the 25th. Now marked as delinquent, your account is hit with a late fee—all because of an issue that isn’t your fault.
Electronic Bill Presentment and Payment (EBPP)
Electronic bill presentment and payment, also known as EBBP, is an electronic system for paying bills. The process allows consumers to use the Internet or mobile phones to pay for everything from utilities to retail.
EBBP has been around since the mid-1990s. So instead of having to wait for that check to reach the electric company, your account will be immediately updated to reflect your payment. That’s all possible thanks to EBPP.
The Benefits of EBPP
There are many benefits of EBPP. Online bill presentment provides an unprecedented level of convenience and security. Once a bill is available, a customer can access their account and pay using their preferred payment method.
Because EBPP supports online payment, you can pay your bill on or just before the due date. Customers can also pay bills early or set up payments to be pulled electronically from a bank account when a bill is due. Additionally, tasks like financial reconciliation and accounting are easier to handle. All this makes it more convenient for individuals and companies to do business together.
The use of EBBP has exponentially expanded e-commerce by allowing any type of business to have an online presence. EBPP has been widely adopted in B2B eCommerce businesses because it can save postal fees, provide low-cost transactions, and be used in cash management systems.
The Growth of EBBP
EBPP enables customers to view and pay their bills from the convenience of their own homes. Time-strapped customers have been taking advantage of this free service as it makes it easy to pay their bills.
As commerce becomes more Internet-based, business technologies will further integrate EBBP. Major businesses are expected to adopt EBPP in various industries, including energy and utilities, government, education, transportation, retailers, and health care organizations.
All that growth means big business for the EBBP market. According to market experts, the 6 billion dollar industry for EBBP software will only increase.
Bill Presentment and Your Budget
Online bill presentment allows people to pay multiple lenders and bills in a structured format that easily fits their budget.
A budget is a financial plan that allocates funds for the year. It ensures that your income covers your expenses by putting your bill payment on a schedule. An ideal budget should identify the following:
Fixed Expenses—bills that are the same amount every month. Examples include mortgages, tuition, or installment payments for online bad credit loans.
Variable Expenses—.bills that can change based on your behavior. Variable expenses are things like credit cards, groceries, and certain utilities (gas, water, etc.)
Savings—a portion of your income set aside in an interest-bearing savings account.
The presentment process helps people budget better and make on-time payments happen by providing information about the amount and date of your bills. A well-maintained budget is one of the good financial habits that will keep your financial profile strong.
Why Does Presentment Matter?
It’s easy to think that how your bills look doesn’t make any difference to your bottom line. We often overlook the details in bills and invoices, trust that they are correct, and pay what’s listed.
However, presentment exists to have a clear view of the goods and services that we spend our money on. When a bill comes—whether it’s an “old school” invoice or an emailed PDF—be sure that things like your name and contact information are correct, as well as any account ID or number. And, of course, check the total amount owed.
The presentment process is there to protect you, so take the time to review the details.
Global Electronic Bill Presentment and Payment (EBPP) Market to Reach 35 Billion Bills by 2026 | Yahoo News
Bill Presentment Definition | Investopedia
Bill presentment Definition | Bankrate.com