5 Bill Pay Services Plus Other Options for Automating Bill Payments

For example, you may bite into your overdraft if your payments are for irregular amounts. A gym membership is $50 all year round, but energy is generally higher in winter. To help set a budget for automatic billing software, try to estimate how much time and money you’re currently spending on billing and related tasks. Factor in direct costs of paper billing (like paper, ink, and postage) and indirect costs (like paying an employee to process the data). Automatic debit payments work differently than the recurring bill-pay feature offered by your bank. In recurring bill-pay, you give permission to your bank or credit union to send the payments to the company.

If you’re canceling a subscription—whether you’re moving or just don’t use it anymore—make sure your automatic payments are canceled too. The last thing you need is to pay utility bills for the person who moves into your old apartment. Spreading your payments out like that helps you balance your bills and day-to-day living expenses, so you’re less likely to run out of money at a given time of the month. You just schedule the payments and they’re taken care of—which means no more late fees and less stress.

Time savings

In such cases, you’ll need to decide whether the conveniences of autopay outweigh the drawback of not being able to use your preferred payment method. An automatic bill payment is a scheduled electronic transfer of money to pay a bill from your bank or credit card account to a vendor, creditor, or merchant. You can set one up in a matter of minutes directly through the company you’re paying, or you can enroll in online bill pay through your bank. Another problem can occur when you authorize automatic payments that vary in amount. For example, suppose you set up automatic payments of your credit card bill from your checking account. Setting up automatic bill payment involves making arrangements with the bank holding the checking account to make the exact payment each month.

• Or your cable provider adds a zero to your balance and takes out $850 instead of $85?
• Take a closer look at your spending to identify expenses you may be able to cut or see about moving payment due dates around to give yourself some breathing room.
• Implementing a billing system that doesn’t communicate with your accounting software is just pushing your current billing workload onto bookkeeping.
• Miranda is an award-winning freelancer who has covered various financial markets and topics since 2006.
• You tell the bank or credit union how much to pay and when to pay it each month.
• Make sure to keep an eye on the rates to ensure that you are earning the highest rate, as they change frequently.

So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. It’s crucial to keep track of your automatic payments in a notebook, spreadsheet or calendar. That way you know when bills are due to come out of your account and can make sure you have enough to cover the payment.

No Time Limit

You should review your finances and automated transactions regularly, which for some people may mean a couple of times weekly; for others, it might be every other week. Also, it’s wise to check in when you have significant changes in your life, whether you’ve gotten a raise, took out a mortgage, or moved to an area with a higher cost of living. Or you might find that a chunk of change has accumulated in your checking account which could do more for your finances if used elsewhere.

What if your phone company accidentally withdraws your monthly payment twice? Or your cable provider adds a zero to your balance and takes out $850 instead of $85? Such mistakes, while rare, can happen, and redressing them takes time and effort. The best checking accounts have automatic bill pay and other features, but here are the pros and cons to consider before signing up for automatic bill pay in particular. Halbert Hargrove Global Advisors, LLC (“HH”) is an SEC registered investment adviser located in Long Beach, California. Registration does not imply a certain level of skill or training.

Ways to Automate Your Finances and Supercharge Your Savings

When it comes to the set-up of automating personal finances, there are a few different techniques to try. Here, you’ll learn some of the most popular options so you can decide what’s right for you, whether it’s one method or a combination. Deciding where and when to automate personal finances need not be complicated. Here’s a guide sharing what it means to automate your finances, the different ways you can put your money management on autopilot, and tips for making the process super simple. Automating your finances can be a smart money move that saves you on late fees and reduces financial stress.

• For example, if you set up an automatic payment for your rent every month, you’ll eventually get much more comfortable with what your true spending ability is.
• Just make sure you understand all of the conditions and stipulations behind using autopay with any servicers you’re working with.
• For example, most apps and services have you submit your credit card information when you sign up for a subscription.
• Make sure you understand how much and how often money will be taken out of your account.
• These tend to pay a significantly higher annual percentage yield (APY) than a standard account and are often offered by online vs. traditional banks.

Once you have that information, you can set up a process that ensures everything is taken care of automatically—without requiring you to remember to pay bills and make transfers. Be sure to build in adequate lead time for bill pay, since it can take some banks several days to cut a check and send it to your creditor. Automated billing is a computer-based process used to handle regular invoicing as well as following up on unpaid bills (dunning) and recordkeeping. Most automated billing uses a safe network called ACH, or Automated Clearing House, for electronic funds transfers.

Typically, you sign into your account and head over to your account information. From there, find the “payment information” or automate bill payments “payments” section. You don’t need to give your bank account number to anyone because your bank initiates the transaction.

As long as you can maintain a high enough balance for each bill to auto-draft from your chosen account each month, you can sit back and relax knowing your bills are being paid. When you set up automatic bill pay, you still need to keep an eye on your account. Because you’ll likely cover other everyday expenses, you need to have enough money in your account balance for these automatic deductions. For example, if you have a $200 autopay scheduled tomorrow and you go out for a $100 dinner tonight, your balance will be depleted by $300. Dashia is a staff writer for CNET Money who covers all angles of personal finance, including credit cards and banking. From reviews to news coverage, she aims to help readers make more informed decisions about their money.