Fast, cheap and safe: if e-billing is the wave of the future, isn't it time you rode the crest?

Electronic billing is a concept that has been around for at least a decade. Early adopters of this technology are either Web-based companies born of the electronic age or were in areas that were forced into electronic communications of other types, such as health care and automotive EDI (electronic data exchange).

Yet after September 11, electronic billing has been pulled out, dusted off and examined by more traditional companies with renewed interest. There are several reasons for this:

* Electronic billing is fast--Electronic billing is accomplished through two very popular uses of the Internet today: e-mail and Web pages. Both are near instantaneous. This can significantly reduce the lag time associated with print, mail and delivery of traditional invoices and statements. This is only on the outgoing side. On the return side, time is saved over manual processing, check cutting and return mail with the use of secure payment via online credit card transactions. Both company and customer save time--and time is money!

* Electronic billing is cheap--Because the costs associated with hard copy and traditional postage and handling can be significantly reduced, there is a real potential for savings related to handling and distribution of invoices and statements. Each company's cost savings will vary lockbox charges for mailed checks vs. online transaction fees for credit cards.

* Electronic billing is safe--While the U.S. Postal Service and many businesses nationwide have had to significantly increase awareness, security and costs to combat potential postal anthrax threats, electronic media poses no such problem. This reduces the load on the sender and receiver of electronic correspondence.

* Business use of e-mail and the Web is approaching critical mass--While leading-edge companies have been making hay (or blowing smoke) with the Internet for several years now, many smaller businesses have not completely jumped onto the electronic bandwagon. Recent polls, however, suggest that a predominant percentage of business people are becoming 'comfortable with e-mail as a primary means of communication. The market for electronic communications has arrived.

Consider this: 45 percent of banks currently offer online banking, and this figure is expected to balloon to 87 percent by the end of 2002. While financial trading was one of the pioneers of the Web, banking is a bit more conservative. Anyone going to electronic commerce behind the banking industry can safely be considered a laggard!

If you're interested in electronic billing for your company take these steps:

1. Survey your customers to gauge interest--This is easy. You're already sending them a bill; just send them a questionnaire along with it. Follow up with phone calls if necessary to get their reaction. If there's not a significant level of interest from your customer base to interact with you in this fashion, you can stop now.

2. Evaluate your current level of automation and what alternatives your software vendor provides for electronic billing--Your current accounts receivable or billing package will need to have either import and export capabilities to allow you to move data to an electronic billing application, or your vendor will need to provide you with an interface that can be incorporated into your existing Website. Both sides are critical--getting the billing information to the electronic billing package and getting the payment information back into the A/R package securely is the primary goal.

3. Decide how to make the change--Depending on your answer to Step 2, you may need to go looking for some Web development talent to work with you, or you may need to work with an existing vendor to get an estimate for hardware and software to enable an e-billing system.

4. Evaluate your network--If this is your first foray into connecting in-house data to your public Web face, your bandwidth and security measures may not be up to speed for it. Get an evaluation from a network or security firm if you don't have the expertise in house.

5. Evaluate the current processes in place for your paper billing--In order to achieve significant cost and labor savings as well as improve the customer's experience, it's necessary to do a bit of re-engineering. Your current process contains many steps critical for the production and correct distribution of paper. When paper is not the delivery device, the steps need to be re-examined to see if they still add value. New delivery methods provide new opportunities to "up-sell" and provide additional value to your customers, so make sure to take advantage of those.

6. Keep in mind that this is a gradual transition, and not a "cold-turkey" type of conversion--While you can safely bet that a majority of your customers now have an e-mail address, you cannot safely bet on the number of them that are ready to move to this method of payment (although your survey will give you a good idea). Your existing paper invoice/statement system will need to stay in place for some amount of time--potentially several years. The target: aim to move a majority of your business to electronic, not 100 percent. This will allow re-engineering of the existing paper process to gain significant cost reductions. The cost savings for each company will have to be determined at various levels of participation.

7. Plan carefully, execute in steps, measure the results and learn--Web applications typically require a nontraditional software development approach (you learn as you go). Because this is a phased approach, build in an evaluation after each phase is executed and adjust your next phase to take advantage of the newly acquired knowledge you have gained. Create your phases to allow a reasonable amount of time to implement, while not sacrificing the ROI by staying in the learning zone too long.

The Detroit Regional Chamber has begun its own foray into electronic billing. A beta test to a small group of Chamber members was sent out recently. Before we started our test, we surveyed a portion of our members, and 65 percent of surveyed members indicated they would prefer to be billed electronically.

Please send me your opinions and/or comments regarding electronic billing and what your companies are doing about it.

Hans Erickson is chief information officer at the Detroit Regional Chamber. You can reach him at [e-mail].