Consumer and corporate customers pay bills by check or through various electronic payment options that the biller offers, meaning that billers may accept accounts receivable (i.e., unpaid bills or invoices) payments through numerous channels (e.g., the mail, at a dropbox, by telephone, through the use of electronic devices (e.g., automated teller machines (ATM) and kiosks), at walk-in centers, at the biller’s website, through online banking or a mobile device, or by giving the biller written authorization to debit their account on a one-time or recurring basis). Billers may receive payments directly (e.g., check mailed to the biller’s address), or through a service provider such as a financial institution.
Ultimately, the biller’s bank credits the bill payment to the biller’s account, and the biller processes the remittance advice (e.g., information in a pre-encoded bill/invoice stub, spreadsheet or electronic file describing the payment) to confirm payment receipt from the customer. Billers may receive remittance in paper and/or electronic formats. Paper remittance information can include a single paper advice for each payment, such as the pre-encoded bill/invoice stub that is included when the customer mails a check payment.
Electronic remittance associated with an electronic payment may be received directly from the customer, through the customer’s financial institution along with the electronic payment, or through another company (Third-Party Service Provider) that provides remittance concentration (i.e., aggregation) services.. Third-Party Service Providers offer data verification, translation, transmission and other services to help billers integrate remittance information from disparate sources. Efficiencies of receiving electronic remittance include automated input into accounts payable and a reduction of the exception processing that is associated with paper remittance.
The payment-remittance format and mode of transmission affects the accounts receivable function, with check payments requiring many more steps and interventions than electronic payments like the ACH Network.
