Bill Pay - How to use it & Why
In the course of working with “individual” or “consumer” clients, those who do not own a business themselves yet, I saw a pattern. There is a struggle on how to pay my consulting business. Not, a struggle that there are not funds to pay the invoice, but how to pay my firm with a good old-fashioned check.
Clients who are business owners have had no issue but those without their own business have. Why? Individuals are used to paying everything digitally now, period.
Businesses often pay many vendors by check. Landlords, IT firms, health insurance premiums, trade association fees, the list is endless. So, individuals owning a business under a “corporate veil” are used to writing out checks.
For instance, I buy my health insurance through a local chamber of commerce. If I use a credit card I am charged a very high fee on top of the already high insurance premium. So, I write out checks quarterly. And I enjoy using my business checks. It is a physical reminder that I created this entity and brand, all mine.
But for those clients you may have who cannot remember to bring their checkbooks or even cash for smaller services, you and they should research using their personal account’s Bill Pay option at their bank or credit union. A client of mine started using this to pay me and despite a rocky initial process, it is now humming along and seemed a perfect payment method to discuss in the Blog.
So, what exactly is it?
Bill Pay is an online bill paying option, normally offered FREE by most banks and credit unions. It allows you to identify recurring or nonrecurring bills that should be payed directly out of your account. You can direct the payment and the date. You will need to have handy the name of the recipient and their address. Most Bill Pay services send out a paper check. So, keep that in mind when you are choosing the payment date. Note that just because the amount has left your account immediately, the bank still has time to issue the check under their rules. And it may be after your due date.
In the case of my firm, the first check was about 10 days overdue. But the client then adjusted the issue date with the bank and Voila, there was the check, made payable to my firm, a few days before the due date! I was thrilled. I no longer have to discuss payment with them. As my services are rendered, they will be able to pay me on time, via check, and not have to worry about where their physical check book is, a convenience for both parties!
I had never really given much thought to receiving payment like this until this opportunity presented itself. Kudos to the client who imagined a better way to pay me!
Please note that this may not work for a business paying a business. Usually, that service through business or commercial accounts, comes with a cost to the sender and possibly the receiver. This is really the best way for an INDIVIDUAL only to pay a small business, usually one offering some type of professional services.
Ask your CPA, your Lawyer, your Business Consultant, your Circle of Trust Advisors, if they can receive payment this way. If they do not accept credit cards, Automatic Bill Pay is a great alternative for an individual to pay for small business services. And, as mentioned above, it is usually FREE to the personal sender. And, to our knowledge, most banks and credit unions offer the service.
Next time you find yourself wondering how best to make your payment to a small business, be like our dog in today’s photo. Stop, assess your options, enjoy that you have options, and make a decision to try a new way to jump out of your dilemma. Likely, your service provider will appreciate the check sent to their business on time, the check made payable to the business not them personally, and the relief of being paid on time without having an uncomfortable collection conversation.
Try out your Bill Pay option on your bank account and know you are making your transaction with a small business much easier on them and you!
Be well.
