From pop-up shops to ecommerce giants, every business has to manage expenses. Handling payments might seem as simple as writing a check or entering information into an online form. But there’s a variety of methods to consider, each of which has its own benefits, costs, and processing speeds.

A business’s monthly bills can include rent, utilities, and credit cards—all of which vary significantly depending on location, business model, and size. Below, we’ll explore the most common methods businesses use to pay bills, common mistakes to avoid, how Stripe supports automated payments, and how to pick the best payment method for your business.

What’s in this article?

• What are the most common ways to pay bills?
  
• How does electronic bill payment work?
  
• How does Stripe support automated bill payments?
  
• What are common mistakes in bill payment management?
  
• How to choose the best method for your needs
  

What are the most common ways to pay bills?

Businesses employ a wide range of bill payment methods, from traditional to more modern means. The right choice for your business usually depends on the entity you’re paying and how often. Below are some popular options.

Paper checks

This method involves sending a physical check to a service provider by mail or in person. Checks create a paper trail and are widely recognized, and some business owners (and certain industries) might feel more comfortable with this more traditional method.

But checks take longer to arrive and clear, and there’s always a chance they can get lost in transit or misplaced on someone’s desk. Additionally, some businesses no longer accept checks due to their potential for fraudulent use.

Credit or debit cards

You can pay bills with a debit or credit card. Card payments are generally fast, easy to track in your statements, and they might come with reward points if you use a business credit card.

However, some service providers apply a surcharge to cover card processing fees. And if you carry a balance on a credit card, you’ll have to pay interest to the issuer.

Electronic transfers

This method involves electronically transferring money through the local system for bank-to-bank transactions, such as the Automated Clearing House (ACH) network in the US or the Single Euro Payments Area (SEPA) in Europe. Fees are relatively low for this payment type, and transfers are suited for recurring bills, such as those for rent or utilities. It’s also generally straightforward to implement automated ACH transactions.

However, electronic transfers can take a couple of days to finalize, and returns can happen if the receiving or sending bank flags the transaction.

Wire transfers

A wire transfer involves sending funds directly from your bank to another bank. It’s usually much faster and more secure than mailing a check, and it can be indispensable for large or urgent payments—particularly across borders.

One of the drawbacks of wire transfers is the possibility of a fee for both the sender and receiver, which can be detrimental for large transactions. Wire transfers also tend to require manual information entry.

Online bill pay services

This method involves using dedicated platforms, which are often operated by your bank or a third party, to handle bill payments. You can log in once, set up payments, and schedule them as needed. It’s a useful way to handle many recurring bills in one place.

However, some of these platforms charge monthly or per-transaction fees, and some might not sync well with your existing accounting software.

Mobile payment apps

Mobile payment apps such as digital wallets allow you to pay bills or send money directly with your phone or computer. These apps are quick to set up, offer instant or nearly instant payments, and require minimal effort from both the payer and the payee.

Mobile payment apps are best suited for more casual transactions, and they can lack the more formal structure you might need to keep detailed records. Fees or currency conversion rates might also be high, especially for bigger transactions or cross-border payments.

How does electronic bill payment work?

Electronic bill payment means digitally moving money from your account to that of your service provider. This can be facilitated through an online banking portal, a specialized payment service, or an automated system.

To start an electronic bill payment, first ensure you have the right routing and account numbers—whether you’re sending a recurring rent payment to a landlord or paying a painter who did work on your storefront for the first time. Then, collect any information needed for cross-border payments, such as a Society for Worldwide Interbank Financial Telecommunications (SWIFT) code.

Next, log in to the platform where you’ll make the payment. Enter the amount, confirm the payee, and choose a date to send the funds. Some platforms let you create recurring schedules, so you can pay the same bill monthly or at another regular cadence without reentering data.

Once you confirm you want to pay, the system might ask for a second form of authentication (e.g., a verification code sent via a text message) for added security. The bank or payment network will process your request. Depending on the platform, the transaction might settle almost immediately or take a day or two to process.

After the transaction is complete, both you and the payee will typically receive a payment confirmation, such as a unique number for your records or an online receipt.

How does Stripe support automated bill payments?

Stripe allows businesses to both send and accept online payments in multiple ways, simplifying your entire payment system. Here are some of the main functionalities Stripe offers that can help you pay your bills:

• You can send money to external bank accounts with Stripe Connect.
  
• You can use the Stripe Dashboard to see which provider has been paid, how much each has received, and when.
  
• You can export Stripe data or integrate Stripe with your accounting software.
  

What are common mistakes in bill payment management?

Making mistakes in your bill payments can lower your profit. Below are some pitfalls that can affect even the most careful team.

Paying bills too infrequently

There’s a temptation to handle bills in one marathon session at the end of the month, but this can lead to rushed data entry, last-minute surprises, or late fees. Weekly or biweekly reviews can break up the workload into smaller, more manageable portions.

Ignoring variable due dates

Relying on a single monthly payday can cause confusion or late bills. While rent might be due on the first of the month, other bills such as credit card or employee meal program payments might occur in the middle of the month or weekly. Create a calendar system that clarifies each service provider’s billing cycle to avoid mistakes.

Entering the wrong bank details

Sending money to the wrong account by mistake can lead to time-consuming refunds or disputes. Always double-check the account and routing numbers, especially for new service providers. This is why many payment systems send test transactions or hold small amounts to confirm the payee is correct.

Missing out on early payment discounts

Some service providers might reward you for paying promptly. Automating payments so they go out before the due date is one way to lock in those potential savings.

Overlooking transaction fees

Wire transfers, card payments, and international transactions can come with fees on either side. Monitor your statements to see whether those fees are higher than you realized. In some cases, switching to ACH payments or adjusting how often you pay might decrease fees.

Forgetting to record each transaction

If you rely on manual data entry, human error is inherent. Even one small mismatch can distort your books. Consider a system that automatically syncs your payments platform with your accounting software to prevent these errors.

Not following up on failed payments

Electronic payments can fail because of incorrect information or insufficient funds. If you don’t spot the failure, a bill might go unpaid. A good system will send alerts when something goes wrong, so you can address any issue right away.

How to choose the best method for your needs

Every business has different needs. One might have two monthly bills and zero international payments; another might handle dozens of monthly bills for rent and utilities across shops in multiple countries. Here are some important considerations as you decide which bill payment method (or combination of methods) works best for you:

• Transaction volume: If you pay only a few bills each month, you might not need a fully automated system. Conversely, if you handle large numbers of bills, advanced automation could save you valuable time and effort.
  
• International service providers: Wire transfers and specialized platforms can help you move funds across borders, but make sure you understand the fees and exchange rates before you commit. Certain solutions, including Stripe, can convert currencies automatically.
  
• Processing speed: If you need an instant or same-day payment, a mobile payment app might be your best option. For less urgent bills, ACH is often cheaper, even if it takes a couple of days to process.
  
• Budget for fees: Examine all monthly fees or transaction costs. It’s not always best to pick the cheapest route, but you don’t want to pay more than necessary.
  
• Accounting software: See what payment methods and integrations your accounting software supports. It means less work if you can sync data automatically rather than type the same information into multiple systems.
  
• Service providers’ payment preferences: Some providers might insist on a check, while others might prefer ACH payments. You’ll make everyone happier with a system that can meet their expectations as much as is feasible for you.
  
• Security and privacy: Certain industries, such as healthcare, require enhanced security measures. If this is a consideration, understand how well you’re protected and what features are in place.