Paying bills is an essential part of every startup. Suppliers, vendors, and contractors need to be paid on a regular basis. But while essential, paying bills is time-consuming and, frankly, tedious. It’s certainly not the reason you launched a company.
And while technology has made the process easier (nobody’s printing paper checks any more), it still has limitations. Someone needs to enter new vendors or contractors, check invoices, correct errors, and authorize payments.
Our Bill Pay Service can give you more time to focus on your startup by taking the responsibility of paying bills off your shoulders. We work with your chosen payment solution (like Bill.com, Ramp, Brex, Routable, and Airbase) and set up a customized payment process that follows your workflows and authorization designations. We handle the details and you authorize payments as needed.
Our Bill Pay Service makes it much easier for you to make sure your invoices are paid, and it offers several benefits to you:
Our Bill Pay Service will establish a standard payment workflow that includes your approvals and that can scale as your startup grows. We work with your payment system, including Bill.com, Ramp, Brex, Airbase, and Routable. Our workflow includes the following stages:
If you dread facing a pile of unprocessed invoices every month, you’re in good company. Most startup founders and CEOs don’t enjoy paying bills. And if you’re working with limited resources like most startups, your team may not have the bandwidth to process invoices in addition to all the other financial tasks you need to handle to hit your startup’s milestones. Outsourcing your accounts payable (AP) function could help you focus on your top priority: Building your business. Let’s look at some of the reasons why outsourcing your bill payments may be a good idea:
It’s a largely separate function. Paying bills is probably not as integrated into your business as many other functions like operations, so outsourcing accounts payable is usually pretty easy and efficient.
Paying bills includes a lot of steps. The process varies from business to business, but typically accounts payable steps include capturing invoices, matching purchase orders, processing invoices, obtaining approval, keeping payment records, and financial reporting. That’s a lot of detail and paperwork for your staff (or you)!
Processing invoices costs you time. Your AP workflow probably requires significant time and resources, as you can see from the steps above. If there’s a lot of back-and-forth between departments to verify and approve invoices, the costs mount up quickly.
You need controls. Duplicate invoices can be a serious problem for a startup, and it can happen easily. A delay in payment could trigger another invoice from a vendor, and without careful controls you could pay twice! Missed or late payments can affect your vendor relationships, and create issues with financial metrics like your burn rate.
Smooth vendor relationships. You definitely don’t want your vendors to find it difficult to work with your startup. Missed due dates and payments mean vendors will be contacting you to track down their payments, which puts strain on your vendor relationships and further increases the amount of time you’re spending on bills. If the vendor resends an invoice and you accidentally pay it again, that’s affecting your bottom line as well as increasing the time spent.
Outsourcing is less expensive than adding headcount. Hiring people to handle bill payment increases your startup’s overhead, and salaries are probably already one of your largest expenses. Plus, you’ll need to spend time and money recruiting and hiring.
Better accountability. An outsourced bill payment service can provide your accounts payable the attention it needs. Most employees at a startup already wear a lot of hats – this is one role that can be delegated to an outside resource. Your payment vendor will usually provide reporting as well, including things like month- and year-end close and reconciliation.
Fewer errors. With bill payment, things don’t always go perfectly. Automated invoice scans can generate a lot of errors that require review and often, manual corrections. An outsourced provider will handle those details and make sure the invoice payments are accurate and timely. And with an outsourced service, you’ll have an audit trail that you can review if necessary.
So if you’re dealing with a backlog of unprocessed invoices, or spending many hours each month paying bills, outsourcing your accounts payable can save you a lot of administrative headaches and more importantly, time. You, and your employees, can get back to the business of running your startup, without the responsibility of paying bills.
Startups have a range of options for bill payment systems. Bill payment software keeps track of what bills you owe and when they need to be paid, and that’s important to running your business. The best systems automate manual processing, and include things like accounting software integration and invoice scanning. Good bill payment systems should reduce manual data entry, streamline your accounts payable process, and include customized approval workflows to route payments to managers. Here are the providers that most of our clients use.
There are three main reasons why startups should use Bill.com:
Ramp’s bill pay feature has added a financing option, which could be very useful for for bootstrapped or struggling startups. Businesses using Ramp bill pay can get credit for a reasonable interest rate that may be better than what they’re getting from other credit options. You’ll need to compare the financing rates of different credit options to see which one offers the best deal, but Ramp is one you may want to consider.
Startups that use Ramp to make payments can now take advantage of Ramp’s international payment service. One of the features is that for many countries, you can actually issue payment in that country’s currency. So vendors and contractors don’t have to convert currency or get charged additional fees for foreign currency.
Omri Mor, Co-founder and CEO of Routable, explains how the company’s platform sends B2B payments worldwide. Routable focuses on helping businesses scale their payment solutions, the company developed its platform for sending B2B payments worldwide, helping businesses automate their accounts payable processes from vendor onboarding to final payment.
Airbase, one of the leaders in the startup world for expense management tools, has established a cashback program on card purchases by Airbase clients. This is in addition to their very robust expense management software, and it’s very helpful to early-stage startups that are extremely price sensitive.
Brex offers startups a sophisticated financial stack that includes things like expense management, bill pay, cash management options for funds, and business credit cards. The online interface lets founders and CEOs view all finances in one place, and Brex integrates with accounting and payroll systems.
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