The invention of the barcode and scanner did for supermarkets exactly what automated bill pay is doing for family offices and wealth management firms. How so?
On June 26, 1974, a pack of chewing gum had the distinction of being the first grocery item ever to be purchased and scanned at checkout. Prior to that auspicious event, the process of getting food into store warehouses, onto shelves and paid for by customers was burdened by all-paper record keeping, rife with error and ripe for every manner of malfeasance. With an inventory system hailing back to the 19th century, at the end of the day, nobody even knew how much of anything was sold.
That all changed in the summer of 1974 when stores quickly started adopting the barcode and scanner, which automated every step of that process, and in so doing, reduced the risk of error and pilfering to near nonexistence. Not to mention, it made inventory and ordering practically automatic.
If this scenario seems familiar, that’s because in much the same way home offices and wealth management firms who provide their clients cloud-based automated bill pay software, like that provided by Bill.com, are offering similarly transformative benefits to their high net worth families and removing the slowness, inaccuracy and lack of security common to traditional back office financial processes.
Imagine for your clients: no more keeping literal “books” on spreadsheets in binders, and no more issuing paper checks and hoping the U.S. mail delivers their payments (especially with recent news of the postal service slowing down deliveries). Instead, an automated bill pay system (like Bill.com) simplifies, digitizes and fully automates the process. It also reduces the chance for error almost entirely, speeds up the whole bill pay process and leaves little opportunity for those who might try something illegal. Finally, it does for the normally laborious audit process what the barcode did for store inventory.
This explains why an increasing number of single family offices (SFOs), multi-family offices (MFOs) and wealth management firms (WMFs) now offer automated bill pay as part of their management package for clients. And since some 80 percent of all-size businesses still pay their bills with paper checks, that provides a very large opportunity for SFOs, MFOs and WMFs.
And embracing automated bill pay is trending up. For example, Bill.com, as of the end of the fourth quarter of fiscal 2021, experienced year-over-year growth of 24 percent serving 121,200 customers. Those are customers, including SFOs, MFOs and WMFs, that have embraced the technology because they understand that bill paying is a key area of risk and time lost for their HNW clients. They have seen that automating bill pay removes the need for paper shuffling and allows HNW clients to stay on top of bills from anywhere via a mobile app.
Many of those SFOs, MFOs and WMFs are happy to share how that technology has not only made their business more efficient, and their clients happier, but it also has brought in new business and increased client “stickiness.” And they will tell their stories in a follow-up article to this one.
But the main goal in this space is to simply explain what automated bill pay is and how it works, making it easier for you to explain to your clients the benefits of the technology. In essence, the process comes down to taking the four manual steps of paying bills (capture, approve, pay and sync) and reconciling the books and simplifying them. Automating those four key steps, in essence, automates the workflow.
To begin with, the technology offers automation from the moment an invoice is received. For example, with Bill.com, powerful features like Intelligent Virtual Assistant (IVA) all but eliminate data entry by automatically capturing required invoice data as soon as invoices hit the inbox. The system starts the bill creation process by pulling in required invoice data, such as vendor name, invoice number, invoice date, due date and amount.
And to ensure accuracy, clients have the opportunity to review any invoice before submitting it. Top-tier solutions also automatically detect duplicate and incorrect invoices, alert those in the review chain and reconcile invoices with a client’s accounting system and bank accounts. Approvals are set up ahead of time so the right people can approve when bills are paid, and with the mobile app, they can approve on the go.
In addition to all those benefits, offering this service shows you want to proactively offer assistance in another aspect of your clients’ personal and financial lives. As Kevin Au, Senior Director of Product Marketing at Bill.com says:
“Constraints on your high net worth clients can take attention away from important day-to-day tasks, such as management of bills and accounts reconciliation. This commonly leads to overlooked invoices, inaccurate account records and a litany of other financial tracking issues. Offering a solution to those issues shows that you understand the value of ensuring your HNW clients are well taken care of at all levels.”
Simply put, understanding and explaining how these technological advances benefit your clients is good for business, your clients’ certainly, but yours, too.
As stated earlier, the purpose of this article was to bring you up to speed on, and get you comfortable with, automated bill pay, so you feel comfortable offering it to your clients. The companion article to this one, “The Way You Pay Is Who You Are,” will appear soon on Worth.com and will offer real-life examples of how embracing automated bill pay not only measurably improves and expands business for SFOs, MFOs and WMFs, but also how it can increase your appeal to a new generation of high net worth clients just over the horizon.
And finally, a historical fact you can feel free to share with your clients: Issuing checks to pay bills and sending them through the mail originated in the United States…in the 18th century.
