Presentment

Definition

Presentment involves delivering a financial instrument (such as an invoice, bill, or payment request) to a party responsible for payment. In the context of online billing, presentment typically means sending electronic invoices to customers once their orders have been fulfilled. This process ensures that customers receive their bills promptly and securely, facilitating timely and efficient payments.

Examples

E-Commerce Store: An online store sends an electronic invoice to a customer after an order is shipped, detailing the total amount due, shipping costs, and payment instructions.
Utility Company: A utility provider emails monthly billing statements to customers, outlining the charges for electricity, water, or gas consumption along with due dates for payment.
Freelance Services: A freelancer sends an online invoice to clients after completing the agreed-upon work, specifying the project deliverables, hours worked, and total payment required.

Frequently Asked Questions

What is the purpose of presentment in online billing?

Presentment in online billing aims to streamline the payment process by promptly delivering invoices or bills to customers electronically. This efficiency helps businesses manage cash flow better and improves customer satisfaction due to faster billing cycles.

Is presentment the same as payment?

No, presentment and payment are distinct processes. Presentment is the act of delivering a bill or invoice for payment, while payment is the act of settling that bill by transferring funds from the customer to the business.

How does electronic presentment benefit businesses?

Electronic presentment reduces the costs associated with physical billing (printing, postage, etc.), speeds up the billing cycle, and minimizes errors in bill delivery. Moreover, it provides a more convenient and eco-friendly option for both businesses and customers.

Can presentment be automated?

Yes, many businesses automate the presentment process through billing software or ERP systems, which generate and send invoices automatically based on the completion of orders or services.

Fulfillment

Definition: Fulfillment refers to the process of receiving, processing, and delivering orders to customers. It involves all the steps necessary to ensure that customers receive their products or services in a timely manner.

Invoice

Definition: An invoice is a commercial document issued by a seller to a buyer, indicating the products, quantities, and agreed prices for products or services that the seller has provided.

Electronic Bill Presentment and Payment (EBPP)

Definition: EBPP is a process that allows bills to be created, delivered, and paid online. This system integrates billing and payment into a single electronic platform, enhancing convenience and efficiency for both billers and payers.

Accounts Receivable

Definition: Accounts receivable represent the outstanding invoices a company has or the money it is owed from its customers for goods or services delivered or used but not yet paid for.

Online Resources

Wikipedia - Electronic billing: Comprehensive information about the process and tools used for electronic billing. Wikipedia - Electronic Billing
Investopedia - Billing Cycle: Detailed explanation of billing cycles and their importance in business operations. Investopedia - Billing Cycle

Suggested Books for Further Studies

“Billing and Collections Best Practices: A Practical Guide” by Steven M. Bragg: Provides practical insights and techniques for managing billing and collections efficiently.
“Financial Accounting: A Business Process Approach” by Jane Reimers: Book explaining the broader context of financial accounting which includes understanding billing processes as part of financial operations.
“Electronic Commerce: A Managerial and Social Networks Perspective” by Efraim Turban, et al.: Highlights various aspects of e-commerce, including electronic billing and presentment systems.

Fundamentals of Presentment: Online Billing Basics Quiz

### What does presentment in online billing primarily involve? - [x] Sending electronic invoices to customers - [ ] Receiving payments from customers - [ ] Delivering physical invoices - [ ] Processing returns and refunds > **Explanation:** Presentment in online billing primarily involves sending electronic invoices to customers after their orders have been fulfilled, facilitating efficient and timely payments. ### What is NOT a benefit of electronic presentment? - [ ] Reduces printing and postage costs - [ ] Speeds up the billing cycle - [ ] Minimizes billing errors - [x] Increases need for physical storage > **Explanation:** One of the major benefits of electronic presentment is that it reduces the need for physical storage compared to paper invoices. It also minimizes costs and errors while speeding up the billing cycle. ### How does automation enhance the presentment process? - [ ] By increasing paper usage - [x] By generating and sending invoices automatically - [ ] By requiring more manual intervention - [ ] By decreasing the speed of billing > **Explanation:** Automation enhances the presentment process by generating and sending invoices automatically based on order completion, decreasing manual workload and improving efficiency. ### What is the main purpose of presentment? - [ ] To remind customers of their purchase - [ ] To record the shipment of orders - [x] To deliver a bill or invoice for payment - [ ] To process customer returns > **Explanation:** The main purpose of presentment is to deliver a bill or invoice to customers for payment, thereby facilitating the accounts receivable process for businesses. ### Presentment in the context of online billing is a process related to which of the following? - [ ] Inventory management - [x] Payment processing - [ ] Customer feedback - [ ] Product development > **Explanation:** In the context of online billing, presentment is related to payment processing, as it involves sending digital invoices to customers for payment. ### Which terms are closely related to presentment? (Select all that apply) - [x] Invoice - [ ] Packaging - [x] Fulfillment - [ ] Advertising > **Explanation:** Terms closely related to presentment include Invoice, which is a bill sent to customers, and Fulfillment, which is the process of preparing and delivering orders. ### What type of companies typically use electronic presentment? - [ ] Only large manufacturing companies - [x] Any company that bills customers - [ ] Only non-profit organizations - [ ] Only hospitality services > **Explanation:** Any company that bills customers for products or services, regardless of industry or size, can use electronic presentment to efficiently handle invoicing. ### What is a key advantage of electronic bill presentment and payment (EBPP)? - [ ] Lower convenience for customers - [x] Integration of billing and payment on a single platform - [ ] Increased manual intervention - [ ] Reduced necessity for follow-ups > **Explanation:** A key advantage of EBPP is the integration of billing and payment on a single platform, which simplifies and speeds up the entire billing process for both businesses and customers. ### Which entity is responsible for paying the bill in the presentment process? - [ ] The merchant - [ ] The supplier - [x] The customer - [ ] The government > **Explanation:** In presentment, the customer is responsible for paying the bill or invoice received for products or services provided by a business. ### How does electronic presentment contribute to environmental sustainability? - [x] Reduces paper usage - [ ] Increases the efficiency of product returns - [ ] Promotes physical mailing - [ ] Reduces customer interaction > **Explanation:** Electronic presentment contributes to environmental sustainability by reducing the need for paper, cutting down on printing and mailing of physical invoices.

Thank you for exploring the concept of presentment with us. Keep applying these principles to improve your understanding of online billing and payment systems!