What it means
The idea joins two activities that used to be separate. Presentment is showing the customer what they owe and why, and payment is the mechanism that moves the money, and EBPP puts both in one place so the customer never has to leave the bill to settle it.
Utilities, insurers, telecoms companies and local authorities were the early adopters, and business-to-business billing has followed. The commercial appeal is a combination of cost and speed.
A printed and posted bill carries printing, stationery, postage and handling costs, and the payment that comes back arrives days later and often needs manual matching against the ledger. Removing the paper takes cost out at both ends and shortens the gap between issuing the bill and having the cash.
There is a working capital effect that finance directors care about more than the postage saving. When a customer receives a bill the day it is raised and can pay it in two clicks, days sales outstanding falls, and every day removed releases cash permanently rather than once.
For a business billing $50,000,000 a year, a single day of days sales outstanding is roughly $137,000 of cash. Implementations come in two broad shapes.
In the direct model the biller runs its own portal and owns the customer relationship, and in the consolidator model bills are aggregated into a bank or third-party app so the customer sees several billers in one place. Many organisations run both, accepting that the consolidator brings reach while the direct channel brings control and cross-sell opportunities.
The main constraint is adoption rather than technology. Customers have to opt in, some segments strongly prefer paper, and regulations in several sectors prevent a biller from forcing electronic delivery, so the business case must be built on a realistic take-up percentage rather than the full customer base.
Sensible programmes run for years and measure the enrolment rate as their primary metric.
In practice
Real-world examples.
Example
A municipal water authority moves rates notices to an email-and-portal model with a card and direct debit option built into the notice. Postage volumes drop by half in eighteen months and the call centre reports fewer queries because customers can see their consumption history alongside the bill.
Example
A commercial equipment lessor presents monthly schedules through a customer portal with a downloadable remittance file. Corporate customers load the file straight into their accounts payable systems, and the lessor's cash application team stops rekeying several hundred payments a month.
Example
A regional insurer offers a small discount for electronic delivery on renewal notices. Enrolment climbs past 70% within two renewal cycles, and the insurer redirects the print budget into a payment reminder service that reduces lapsed policies.
Formula
Calculation
Annual Saving = (Cost per Paper Bill - Cost per Electronic Bill) x Annual Bill Volume x Adoption Rate
A utility issues 40,000 bills a month, which is 40,000 x 12 = 480,000 bills a year. Fully loaded, a paper bill costs $1.20 to produce, post and process, while an electronic bill costs $0.35 covering platform fees and support.
After a two-year push, 60% of customers have signed up, so the electronic volume is 480,000 x 0.60 = 288,000 bills. The saving per converted bill is $1.20 - $0.35 = $0.85.
The annual saving is therefore 288,000 x $0.85 = $244,800. On top of that sits the cash benefit: if the programme also cuts days sales outstanding by three days on annual billings of $50,000,000, the one-off working capital release is 3 x ($50,000,000 / 365) = about $410,959, which is a larger number than the cost saving in the first year.Case study
Seen in the real world.
Fairmount Utilities is a fictional water company created to illustrate how an EBPP business case typically plays out. It issued 480,000 bills a year on paper at a fully loaded cost of $1.20 each, with the finance team fielding a steady stream of calls about bills lost in the post.
The project team built the case on cost alone at first: 60% adoption on 480,000 bills at $0.85 saved each gave $244,800 a year, against a platform build of around $600,000. On that basis the payback was well over two years and the board was lukewarm.
The finance director reframed it. Adding the three-day reduction in days sales outstanding on $50,000,000 of annual billing released roughly $410,959 of cash in the first year, and the reduction in bill-related calls saved a further part-time role. Fairmount approved the project, hit 43% adoption in year one and 61% in year two, and now treats the enrolment rate as a standing board metric rather than a project milestone.
Watch out
Common mistakes.
- Building the business case on 100% of bill volume. Adoption is voluntary in most sectors and a realistic first-year rate is often under half the customer base.
- Counting only postage in the paper bill cost. Printing, stationery, insertion, returned mail, manual cash application and the calls a confusing paper bill generates all belong in the comparison.
- Presenting the bill electronically but still requiring a separate payment step elsewhere. Splitting presentment from payment loses most of the speed benefit and frustrates customers.
Questions
People also ask.
Is EBPP the same as electronic invoicing?
They overlap, but electronic invoicing usually refers to structured invoice data exchanged between business systems, whereas EBPP is oriented to presenting a readable bill to a payer and collecting from them.
What drives enrolment fastest?
A default-on option at the point of sign-up, a small incentive at renewal and a bill that is genuinely easier to read online than on paper tend to move the number more than reminder campaigns.
Does EBPP reduce disputes?
Usually yes, because customers can see usage detail and payment history in one place, which removes a large share of routine queries before they become calls.
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