Industry Awakens to B2B Side of EBP

The acceptance of electronic commerce is creating unprecedented

business-to-business opportunities throughout the mortgage industry, according to Cindy Bird, president of First American Default Technologies.

Among these opportunities is the improvement of electronic bill presentment, which involves presenting invoices to a

customer electronically, via e-mail or the Internet, Ms. Bird explained in a recent article.

"This technology is a valuable addition to the mortgage industry, as paper billing has receded into an archaic process, costing companies valuable time, resources and money," she said.

While paper bills have historically been the most consistent and dependable form of communication between companies and their customers, they are slow and inflexible, she said.

Financial databases are used by most companies to generate payment reports, which often must be compared to billing statements before any payments can be made. More specifically, some companies are required to enter each loan individually in order to produce payment.

"Paper billing translates into someone having to conduct these processes manually," she said. "Electronic billing, however, eliminates the manual processes and allows for an expedited turnaround time - with both payment and receivables."

As the paradigm shifts from legacy systems to automated processes, it will be imperative for businesses to maintain continuous electronic communication and build upon its effectiveness, she believes.

While electronic bill presentment is not new to the mortgage industry, the technology has been enhanced to make invoices simpler and efficient. Studies indicate that a growing number of companies want to receive bills online, Ms. Bird said.

"For this reason, a growing number of businesses are strengthening their online invoicing capabilities and beginning to develop the business relationships that will bring electronic bills to their customers," she said.

First American Default Technologies recently introduced iClear, a streamlined invoice management system, which provides an electronic clearinghouse for invoice transactions between loan servicers and their vendors.

Initial benefits of electronic bill presentment include cost savings, improved cash flow, effective cash management and enhanced customer service, she said.

She said that paper billing costs companies about a dollar per invoice to produce, whereas electronic bills cost one-fourth this amount.

"Clearly, cutting paper, labor and postage out of the billing process allows for significant cost savings. Electronic bills shorten the collection cycle, as bills are sent and received almost instantaneously," she said.

In addition, if customers choose to send payment electronically, businesses receive cash more quickly. And electronic payment systems can be integrated with financial management systems to enable businesses to have access to real-time financial data,

without waiting for payments to be recorded by hand or checks to clear.

She said that the time span between loan application and closing is currently too long. Expediting the invoicing process for fundamental transactions can help shorten this period, plus save money for companies participating in the loan closing process.

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