A review of new software products that can make a big difference to your business

An easier way to pay*

By Michael Burns

*This is an expanded version of a column that appeared in the March 2004 print edition of CAmagazine.

Shame on you if you're not paying your personal bills electronically. But what about sending cash electronically or making a payment to the thousands of Canadian businesses not registered on your bank's online list? And what about settling your business bills electronically – don't you think it's time? The technology is now available. One company that has it is Canadian-based TelPay Inc.

TelPay creates technology for Canadian businesses and consumers to transfer money and make e-payments to anyone in Canada (and soon in the US). It calls itself Canada's largest independent e-payment processor, serving 250 different financial institutions with technologies that facilitate bill payments by way of the Internet, over the phone or at the bank counter. TelPay also offers business payment software appropriate for small and mid-size businesses. It processes 14 million e-payment transactions, including business payments, for a total of $5.3 billion annually.

Most of TelPay's transactions are generated at the consumer level by the customers of the financial institutions that outsource their technology requirements to TelPay. Each of Canada's major banks has its own technology for consumer bill payments so customers probably won't see much advantage in switching to TelPay for personal payments unless they want to pay bills that are not on the bank's online bill payment list.

Beyond e-payments, you can now send cash electronically via e-mail. Five of Canada's major banks now use CertaPay for e-mail money transfers. Another option is PayPal (acquired by eBay in October 2002), which will let you send and receive payments online. You can also use hyperWALLET to make payments on the Internet without a credit card.

TelPay sees a big opportunity in business-to-business e-payments. You can now pay all of your Canadian suppliers, reimburse employee expenses and make electronic remittances to government (GST, PST, CCRA, corporate tax and Worker's Compensation) using TelPay's Business Connect software.

If you produce your payroll in-house, Business Connect also gives you the ability to deposit payments directly into your employees' accounts. This is currently being promoted by payroll software companies such as EasyPay.

Business Connect will reduce your envelope, cheque, courier, cheque clearing and postage costs. You can make e-payments to TelPay's list of 2,000 regular billers as well as your own company-specific list. Payment details such as invoice number and amount paid are automatically sent to each e-payment recipient. The software also allows you to export general ledger details to most accounting packages.

Here are some of the other benefits of using TelPay's business payment software in the place of paper business cheques:

• Streamline cheque issuing, signing and bill payment by 30% to 50%;
• Reduce monthly bank debits (and corresponding transaction fees) to three or four monthly;
• Reduce bank reconciliation time by two-thirds;
• Eliminate postage costs and mail-prep/envelope stuffing;
• Take advantage of payables discounts and help avoid late penalties on government remittances.

The organizations (billers) on the receiving end of e-payments get consolidated payment details and a reduced number of credits (deposits). For example, Toronto Hydro customers can now use a TelPay e-payment to pay their monthly bill. TelPay provides Toronto Hydro with one electronic file containing thousands of customer payments, deposited as one credit into Toronto Hydro's bank account. TelPay's single file is imported directly into Toronto Hydro's accounts receivable system. This same process is also available to smaller billers.

TelPay currently creates general ledger export files for Simply Accounting, AccPac, MYOB, QuickBooks, Adagio and Quicken, and will add file formats as requested. The Business Connect payment system has also been integrated with BusinessVision's Accounts Payable system. Users can set up their invoices and payments inside BusinessVision and then export e-payments to TelPay instead of choosing the "print cheques" function.

Business Connect also has an accounts payable module suitable for a smaller company that doesn't need all the features found in some accounting systems, such as direct links to purchasing, inventory, costing and suggested payment dates based on terms.

TelPay has a long way to go in its effort to establish electronic payments as a standard business practice. It has only 200 business installations today but is convinced e-payments will replace paper business cheques within the next 10 years. There seems to be a compelling business case for electronic payments. But are businesses ready to make the change? I think it's about time.

Michael Burns, MBA, CA, is president of 180 Systems (http://www.180systems.com), which provides independent consulting advice in the selection of business systems. Michael can be reached at 416-963-1296 or by e-mail at mburns@180systems.com