How to use BPAY payments to streamline your company’s financials

If you’re a small business owner, the ability to move money quickly is critical. Being able to send money quickly makes you reliable, meaning that vendors will be more willing to work with you in the future. And being able to accept money instantaneously boosts your cash on hand and working capital, giving you more flexibility for business activities.

One of the options available for you to send money quickly is BPAY, short for ‘Bill Payment’. Today, we’re here to provide you with everything you need to know about the BPAY service so you can determine whether it’s a viable option for you to send and accept business payments. We’ll cover some of the most common BPAY FAQs so you have a clear understanding of how this service works.

What is BPAY? 

BPAY is a service that allows business owners to pay their bills quickly and reliably. BPAY relies on internet banking. Internet banking sites are those that allow you to complete transactions involving your checking or savings account online.

Bill Payment is just one type of online banking option available. There’s a good chance that if you have an existing business account with a bank, you can complete transactions online. PayPal is another such option.

However, through all these options, BPAY Australia continues to be one of the most dominant and widely used throughout the country. More than 170 financial institutions offer BPAY as a payment channel through their online banking services. More than 45,000 companies in Australia accept BPAY. The company processes more than 30 million individual payments monthly, and recently said that it processes 1.6 million payments daily.

One of the reasons BPAY is a convenient mobile banking option is because it accepts an array of payment methods, including:

• Cheques
• Savings accounts
• Checking accounts
• Credit card accounts

What are the benefits of BPAY? 

BPAY can be beneficial for small business owners because it makes it easier to track and manage money. You’ll receive the money within one business day when using the app, improving your day-to-day cash flow.

Additionally, you can sync BPAY Australia with your trusted accounting software. You can set up BPAY so that you automatically pay your bills or run payroll directly. You can opt to make recurring payments through the bill payment service for things such as rent or credit card bills. Being able to make payments automatically helps clear up time for you to focus on other aspects of your business.

How do BPAY payments work? 

Setting up and using BPAY is straightforward. The first thing you’re going to need to do is head to your local Australian bank and inform them that you’d like to become a ‘BPAY Biller’. The organisation will then work to set up a BPAY account that connects with your existing bank account.

Once your bank sets you up as a new biller, you can start requesting money from customers. When you send a bill, you’re going to want to make sure that you include:

• The BPAY logo
• A customer reference number
• Your BPAY biller code

Below, we’ll further detail what some of these terms mean.

You can also include other payment details, like the requested due date when sending your bill. Once a customer pays your bill, you should see the money in your bank account during the next banking business day, or one day after banks in Sydney and Melbourne can settle the transaction. BPAY will also send you an electronic bill payment file for your company’s records.

What is a customer reference number? 

Your customer reference number (CRN) is a number that appears on each bill you send. The number is unique and can range anywhere from two to 20 numbers. As the business owner, you generate the number — it is not something set in stone or assigned by BPAY. Because the number is unique, customers can direct funds your way without having to provide any sensitive personal information. By looking at the CRN, you should know precisely who is providing you payment, so long as you keep diligent records.

Business owners in Australia typically use CRNs in two ways. The first is by using the same CRN number for each customer. For instance, imagine you purchase supplies from Joe’s Wholesale. You assign the CRN 556809 to this account. Whenever you send a BPAY to Joe’s Wholesale, you include the 556809 number. You can easily track all BPAY transactions associated with Joe’s Wholesale account.

The other way that business owners use CRNs is by treating them like invoice numbers. In this case, you change the CRN with each invoice you submit. Let’s say that in addition to Joe’s Wholesalers, you also work with Sarah’s Supplies.

When you send a BPAY bill to Joe’s Wholesalers, you use the CRN 0001. Then, when you send the next bill to Sarah’s Supplies, you use CRN 0002. This allows you to keep track of your BPAY requests chronologically. If you expect to receive multiple payments from a customer in a single billing period, you may find that this ‘variable CRN’ method works better.

The other thing that you may come across when setting up BPAY is an iCRN, short for ‘intelligent customer reference number’. You’ll need to work with your bank to set up your iCRN. An iCRN is an option that gives you a bit more control over when you receive payment on the bills that you submit to customers.

iCRNs allow you to set a specific amount for the customer to pay or a maximum amount that the customer is allowed to pay. They allow you to set a pay-by date for your bills as well. You can set a cut-off so that if customers pay after this date, they’ll owe additional funds in late fees.

How do you set up your BPAY biller account? 

Now that you understand how to bill your customers, let’s get set up. The first thing you’re going to need to do is head to your local bank. If you’d like to get a head start, you can complete the BPAY ‘become a biller’ form, and then contact your bank.

What is BPAY View? 

Upon setting up your account, one of the things you’re going to come across is BPAY View. BPAY View is a service that makes it even easier for your customers to pay your bills. If you enrol in BPAY View, your bills will make their way directly to the recipient’s online bank.

The next time the user logs in to the account, he or she will receive a notification alerting them to the BPAY request you sent. The customer can then elect to pay the bill immediately or schedule a payment for a later date.

Because you’re sending the BPAY notification directly to your customer’s bank, you’re increasing the likelihood that the customer will see it promptly. Similarly, because you’re delivering the bill directly to the customer’s bank, you increase the likelihood that the customer takes time to set up a payment.

One of the other options with BPAY View is to include external web links. You could add a link to a special offer or promotion that you’re running. For example, perhaps you include a link specifically for repeat customers. Because the only way a customer can receive this link is through BPAY, you ensure that it’s only repeat customers who use the link.

As is the case with the standard BPAY service, your bank conducts this operation. As such, your bank is the organisation in charge of setting fees for this service. If you’re interested, be sure to mention the View option when opening your BPAY Biller account with your local bank. Be aware that your bank may charge you additional funds to use BPAY View.

What’s the cost of using BPAY? 

The answer, in short, is that it depends. BPAY in and of itself does not charge anything. You likely won’t have to pay anything to set up your account. Where things get a little trickier is when your bank decides to charge you fees to use the BPAY service.

Because your bank delivers the BPAY service, which is a third-party service, there may be some fees associated with completing a transaction. You’ll want to speak with your bank ahead of time to gain a better understanding of what those fees are going to be. If you feel that the fees at one bank are too high, consider shopping around and opening another bank account to secure a better rate.

Also, remember that there may be additional fees for opting to use credit card payments. The various credit card companies determine these fees. If you don’t account for them when sending your bill, the processing fees will come from your funds directly. Visa, for instance, charges fees of 1.51% of the transaction plus a 10 cent fee.

How do BPAY payments work? 

At some point, another business, like a vendor, may send you an electronic bill and request that you make payments via the BPAY website. This process is much simpler, as you technically don’t need to have a biller account to complete a BPAY payment.

All you need to do is log in to your mobile, online, or over-the-phone banking service. Once in, you should be able to see the BPAY logo. Click this to indicate that you’d like to make a payment. Upon doing so, enter the biller code that the vendor provided you. If the vendor did not provide such a code, you’ll want to follow up ASAP.

The vendor will likely request that you complete a few details before sending payment. The type of information you’ll probably have to include, in addition to the vendor’s biller code and customer reference number, are the payment date and amount. Complete the BPAY transaction, and you’ll be good to go. The vendor will receive your payment the next business day.

Simplify your business with BPAY

BPAY Australia is one of the most popular payment options in the country. As a small business owner, you should consider taking a few minutes to set up a BPAY Biller account so that you can accept payments.

While it’s easy for you to make payments without an account, you’ll need an account if you wish to receive funds. Accepting funds through BPAY not only improves your cash flow, as you receive money in one business day, it also makes life much easier for your customers. By making life easier on your customers, you increase the likelihood of being paid on time. Linking BPAY to your internet banking service further increases the likelihood of on-time payment.

So, consider heading to your local bank to set up your BPAY Biller account. And remember that upon doing so, you should link to your accounting software to help with scheduled payments, allowing you to maximise the benefits of the BPAY program.