Getting your bills into the accounting system is only half of the task when it comes to managing Accounts Payable. We use Hubdoc or Dext for most clients in this respect.
But paying the bills is the second step. Did you know that there are also some great tools available to help you here? If most of your payments are made by credit card or eTransfer (Canada) then you’ve probably got it all covered, but if you need to make payments to more than 5 vendors each month then you might want to consider some additional tools – some of them are free!
Before we look at the options, please let me rant a little bit about checkers (or cheques if you’re above the line). We don’t like them, and want you to stop using them. If you’re still mailing checks then please consider switching to EFT (Electronic Funds Transfer – often referred to as ACH in the US, but we’ll use the more generic EFT here). Preparing and mailing checks takes so much more time, is delayed, and requires lots more time in tracking missing checks etc. You are doing yourself, and your vendors, a favor when you switch to EFT. And it will probably save you money!
First, your bank may have options that will help you. Many online banking systems have vendor payment features that allow you to make EFT payments direct to your vendor’s bank account. Here are some examples:
- Relay Bank (US) will actually pull your Bills from Xero or QBO and allow you to send funds directly to your vendor.
- RBC (Canada – standard online banking) has a “Pay EMP/Vendor” option that allows you to create a payment batch. Please note that the details don’t flow back to your accounting system so you need to advise your bookkeeper each time you make a batch payment.
- BMO Online Banking for Business allows you to create Batches and pay vendors. It’s a little quirky but effective.
- NZ Banks have had the ability to make bank-to-bank payments for 20 years, so Canada and the US are still catching up here!
There are also some great third party tools that could help you here. We’ll mention the ones that we have worked with with clients recently:
- Payment Evolution is a Canadian payroll service, but also has an outbound payments function. It pulls the open bills from the accounting system and allows you to store the bank account number for that vendor and then to initiate a payment. And the best part is that if you’re already using Payment Evolution for payroll then the bill payment part doesn’t require an additional subscription – just some transaction fees.
- Plooto is a tool for US and Canadian businesses that allows you to make ACH payments as well as wire transfers – often for less than your bank would charge!
- Bill.com is one of the oldest of these services in the US and specializes in printing and mailing checks – so if you are still stuck in this world then Bill.com may be useful for you.
Some of these tools offer additional approval workflows as well. We’re tracking several new entrants or updated entrants in this space that we’d be happy to review with you if you are interested.
If you would like assistance in implementing a payments process please let us know.
