How to Avoid Accidental Bill Pay

Building Scale and Security into Operations

As the demand for bill payment and client accounting services rises among high-net-worth and ultra-high-net-worth clients, family wealth firms and business managers are looking for ways to provide these services more strategically and efficiently. Without a systematic approach, firms may encounter risks and mistakes that can impact their operations and client relationships. In this blog post, we will highlight the key considerations outlined more thoroughly in our whitepaper: Avoiding the Risks of Accidental Bill Payment: Building Scale and Security into the Client Bill Payment Process

Recognizing the Value and Risks of Bill Payment Services

Many firms start offering bill payment services for select clients that request it – we call this “accidental bill pay”. The firm wants to meet the needs of their clients, so they take on processes that are paper-intensive and rely on spreadsheets and manual data entry. While this may work for a handful of clients, once more clients start demanding bill pay, this error prone and time consuming approach needs to change to allow your firm to scale and mitigate risks.

Establishing a Scalable and Secure Bill Payment Process

To scale bill payment services effectively, firms must adopt a systematized, repeatable and transparent approach. The first step is setting up a separate operating account to avoid paying bills from clients' online banking accounts, which can compromise security and create difficulties in tracking and resolving issues. Maintaining proper separations of duties is crucial, ensuring the person entering bills is not the same person approving them. Firms can accomplish this by implementing a multi-entity accounting system integrated with a bill payment system and workflow to help enforce controls and approvals, preventing unauthorized fund releases.

Timely Bank Reconciliation and Integration with Accounting Systems

Timely bank reconciliation is an essential but often overlooked task, because most firms don’t have an integration between bill payment platforms and client accounting systems. Falling behind on bank reconciliation creates a lack of scalability and security in the bill payment process. Integrated technology solutions, like AgilLink, seamlessly connect various components, such as approvals, banking, and general ledger, to create a foundation for a scalable and secure bill payment platform that your clients and compliance department will love.

Embracing Technology as a Strategic Asset

To overcome the limitations of a manual, human intensive approach, firms should view technology as a strategic asset rather than a cost center. Cloud-based solutions, integrated through Application Programming Interfaces (APIs), enable firms to create a best-of-breed technology stack. This approach facilitates scalability, efficiency, and profitability, while reducing risk. Providing an enhanced customer experience, like firms do using the AgilLink mobile app, gives clients on-demand access to their bills, and control over their participation level in the bill approval process.

Finding the Sweet Spot between Automation and Control

Achieving the right balance between automation and control is crucial for a scalable and secure bill payment process. Simply adding more controls without integrated technology can slow down the process and increase the risk of gaps and manual errors. Integration of invoice digitization, approval workflows, banking/treasury management, and multi-entity general ledger into a unified system streamlines the entire bill payment lifecycle while ensuring separation of duties, transparency, fraud risk mitigation, and auditability.

As client demand increases for bill payment and client accounting services, it is important to prioritize scalability and security. By implementing a systematic approach, leveraging integrated technology solutions, and adhering to best practices, firms can enhance client relationships, mitigate risks, and streamline their bill payment operations. Embracing technology as a strategic asset and finding the right balance between automation and control is key to building a scalable and secure client bill payment process.

To see how AgilLink can help you transform and scale your bill payment and client accounting processes, schedule a call now.

_{This article and the information contained herein is for general information and education only. It is provided as a courtesy to the clients and friends of AgilLink. AgilLink, as a matter of policy, does not give tax, accounting, regulatory or legal advice, and any information provided should not be construed as such. Rules in the areas of law, tax, and accounting are subject to change and open to varying interpretations. You should consult with your other advisors on the tax, accounting and legal implications of actions you may take based on any strategies presented, taking into account your own particular circumstances.}

_{AgilLink is an RBC company and is an affiliate of City National Bank Member FDIC.}

_{City National Bank is a subsidiary of Royal Bank of Canada. Deposit products and services are provided by City National Bank.}