How can you automate royalty payments? Printing checks, stuffing them in envelopes, and applying postage takes time and money. For many companies the cost to mail a check is a dollar or more.
- Labor (about $0.50 per check)
- Envelopes (about $0.08 to $0.12 each)
- Postage (about $0.50 per stamp in the United States)
Payment automation begins with exporting royalty payments due from EasyRoyalties and importing these records into your accounts payable (accounting) software.
The accounts payable software can be configured to use one of three processes to electronically pay amounts due.
- It may use an ACH payment process that requires the payee’s bank routing number and account number. A payments file is sent to your bank which makes the payments to the specified accounts.
- Or it can interface with an payment services that requires the recipient’s email address or cell phone number. The recipient is sent an email notifying them of the funds available. Once they register with the service they have access to these funds. Some services such as PayPal keep the funds in the payee’s PayPal account, while others will transmit it directly to the recipient’s bank account. Some will mail a check to the payee if no email address is on file. While others will send the recipient a PDF of a check that can be printed and deposited.
- A payments file is exported that is sent to a check printing and mailing service. This file contains the name, address, payment amount and payment description for each recipient.
Payment Automation Options
Below are six payment service options frequently used by organizations using QuickBooks.
- QuickBooks Bill Pay Service – This service will send an electronic payment to the royalty recipient via email. If the recipient cannot accept electronic payments they will be mailed a check. (for users of QuickBooks)
- Bill.com – This service adds an approval workflow process to the payment process.
- Deluxe eChecks – This service emails a PDF of a check that they can printed and deposit. They have a free add-on for QuickBooks Desktop and QuickBooks Online.
- PayPal Payouts – You send a mass payments file to PayPal with the recipients name, email address and amount. PayPal will send each recipient a payment notification. After they create a PayPal account these funds are deposited to this account. After funds are deposited to their PayPal account, the recipient can transfer the funds to their bank account.
- ACH Universal – This product generates an ACH file wit the payment recipient’s routing number, account number and payment amount. The file is transmitted to your bank. The bank uses this file to transfer funds to the designated accounts.
- Check printing and mailing service. Your organization provides the a file with the payee information and the service will generate and mail the checks. These services can also transmit the amount directly to a customer’s account via an ACH file if the customers routing number and account number are provided.
NetSuite offers two ACH payment automation products; NetSuite Electronic Payments (Free) and NetSuite Electronic Payment for OneWorld.