How can you automate royalty payments? Printing checks, stuffing them in envelopes, and applying postage ($0.50 a stamp) takes time and money.
Royalty payments originate from your accounts payable software. This software may use one of two 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 you may 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; often by just specifying the bank they use (if the bank has their email address on file), they have access to these funds. Some services will a check if the payee does not have an email address on file. While others will send the recipient a PDF of a check that can be printed and deposited.
For payments to individuals, a payment services that require only the payee’s email is more popular because recipient’s are wary of sharing their bank account information.
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.
- Some banks offer a payments service for business accounts. The customer provides the bank a file with the payee information and the bank will generate and mail the checks if ACH information is not provided.
NetSuite offers two ACH payment automation products; NetSuite Electronic Payments (Free) and NetSuite Electronic Payment for OneWorld. There are many 3rd party payment applications available for NetSuite