Determining the best process for tracking and paying bills from vendors can be a challenging problem for many business owners, especially as the business grows and expands. By utilizing a bill payment application, companies can save previously spent manually tracking bills, increase organization by keeping bills and payments in one place, increase the accuracy of Accounts Payable reporting, and improve the timeliness of payments to vendors (saving money on late fees).
When deciding which bill payment solution is best for your business, there are a few things to consider including ease of use (intuitive interface); ability to integrate with accounting software; tracking and reporting capabilities (including real-time vendor balance/AP updates); approval workflows; flexible payment options (i.e. ACH, e-check, wire); international and foreign currency capabilities; and, of course, pricing.
Overall, using a bill payment application can improve cash management, increase visibility into cash flows, and lead to better decision-making based on up-to-date information. Below, we will discuss some of the most popular bill pay Applications, why businesses might choose each, and some of the pros and cons associated with each of them.
BILL (previously Bill.com) is the best software for Accounts Payable and Accounts Receivable automation with accounting software, and might be best for growing small businesses that make international payments and are looking to scale. BILL is one of the more expensive options per user, so it may not be a good fit for small businesses on a tight budget or requiring many users.
Pros: BILL integrates with most accounting software (Quickbooks Online, NetSuite, Sage, Xero) and allows for highly customizable transaction sync settings. The software also includes customizable approval workflows and user roles. The BILL Spend & Expense product is a corporate card program (separate from BILL AR/AP) for businesses also looking for a credit card. Finally, this is software is capable of tracking AP and is the best software for AP automation, creating significantly less manual work.
Cons: This Bill Pay & Accounts Payable solution is expensive, with the lowest plan option starting at $29 per user per month. Also, while the software includes helpful pre-built reports (with mixed reviews), there are limited customizable reporting options.
Pricing: BILL subscription plans range from $29/user/month to $79/user/month, with the Enterprise level plan (highest level) consisting of custom pricing for each business. It’s also worth noting that BILL requires a subscription of at least $79/user/month to support both, AP & AR functions of the software. Transaction fees range from $0.49 per transaction to $22.99 per transaction for ACH, check, and international wires. Credit card, debit card, and instant payment fees range from 1%-2.9%. Please refer to the BILL website for additional information on pricing and plans.
Melio’s accounts payable software may be best for small businesses using QuickBooks Online or Xero and making relatively few payments to vendors per month. Also, as companies grow, Melio’s paid plans allow for additional users, more advanced customizations, and unlimited syncs with accounting software.
Pros: Melio’s software integrates directly with QuickBooks Online, QuickBooks Desktop (paid plan), reducing the manual labor of processing bills and bill payments into the accounting software. Another helpful feature of this application is that Vendors are not required to sign-up to the app to get paid. Additionally, businesses can collect W9s within the app and sync the information with Tax1099.com. Melio can also process international payments in 16 different foreign currencies.
Cons: The free version of Melio only supports one user, five ACH transactions per month, and 10 syncs per month to accounting software. Each plan has a limited number of free ACH transfers per month, with the highest paid plan option supporting up to 50 free ACH transfers per month. This may not be a good fit for high transaction volume businesses.
Pricing: Subscription prices range from $0 to $55 per month, plus $8/month per user. Transaction fees range from $0.50 per transaction to $20 per transaction for ACH and check payments. Credit cards are charged a 2.9% fee domestically and a 2.9% + $20 international fee. Please refer to the Melio Website for additional information on pricing and plans.
Since no custom reporting is available until the highest level plan, Ramp’s software might be best for small businesses that are tracking and reporting Accounts Payable outside of the bill pay software. Ramp is also great for businesses that are looking for an all-in solution for bill pay, corporate card, and expense reimbursement management.
Pros: Ramp’s software can integrate with most account software (Intuit, NetSuite, Sage, Xero), with Netsuite and Sage requiring paid plans. Ramp supports international payments and can pay bills by ACH, same-day ACH, Credit Card, Check, or International Wire. The software also provides expense policy enforcement options and can process employee expense reimbursements, making it useful for businesses with employees.
Cons: Ramp’s software does not allow for advanced user roles or permissions with the free plan. Additionally, there is no custom reporting functionality until the Enterprise plan (highest level).
Pricing: Subscription prices range from $0 to $15 per user per month, with the Enterprise level plan’s pricing customized based on the business’s needs. Transaction fees range up to $20 per transaction for ACH, same-day ACH, check and international wires. Please refer to the Ramp Website for additional information on pricing and plans.
Brex’s software may be best for incorporated businesses with employees who travel (especially internationally).
Pros: All plan levels support corporate cards and expense reimbursement management with custom spend limits and approval chains. Also, Brex provides an FDIC insured Brex Account that has no fees per transaction for domestic and international ACHs, checks, or wire transfers coming from the Brex Business Account. Additionally, paid plans include advanced customizable policies and settings, travel booking and management, and can support multiple entities and subsidiaries.
Cons: The Brex Business Account is only available to incorporated businesses. The free plan option is fairly limited on customizable policies and settings. To access most reporting capabilities, including real-time reporting and policy compliance reporting, a paid plan is required.
Pricing: Subscription prices range from $0/user/month to $12/user/month, with the Enterprise level’s (highest level) price customized based on the customer’s needs.
Using a bank’s online bill pay services might be the best solution for small businesses that are on a budget and have simple Accounts Payable and relatively few monthly vendor payments.
Pros: Most of these bill pay services offered by banks are free. One solution, Relay Pro, costs a monthly fee but integrates with Xero and QuickBooks Online. An advantage of using a bank’s bill pay solution is that the bank accounts are already connected to the bill pay software. Additionally, although most of these services can not sync bills or AP to accounting software, bank account activity can feed into any accounting software through the “Bank Feed”, so bill payments will sync through the bank account activity.
Cons: Bill Pay software through banks generally includes very limited reporting functions and AP tracking, and can offer limited payment options (often limited to accounts at that institution). Additionally, most of these bill pay services do not integrate with accounting software and only sync the actual bill payments, not bills or vendor balances.
Pricing: Other than Relay Pro ($30/month), most banks’ online bill pay services are free. Additional transaction fees may apply at each bank.
No matter your current situation, there's a bill payment platform for your business. Which platform fits your specific situation will depend on your unique needs and it’s worth exploring multiple options to compare. If you have any questions or need assistance in choosing what would be best for you to streamline your bill pay and payment processes, please feel free to reach out to the Founder’s team.