E-billing – What is Electronic Billing? eBilling, eInvoicing, and ePayments

What is E-billing?

E-billing, short for electronic billing, is simply the process of paying and receiving bills online. Bills or invoices are generated digitally by computers and software applications. E-billing is not only the generation of e-bills, but also the system that allows these bills to be paid electronically. An e-bill is usually generated by an accounting or financial software solution and then sent to the payer by email or a web-based portal. This e-Billing and e-payment portal usually allows the payer to access copies of their e-bills and manage or update information. E-billing is a fundamental component of modern finance and is leveraged by both accounts payable (AP) and accounts receivable (AR) departments to help automate workflows and reduce reliance on paper-intensive processes.

What Are the Benefits of E-billing?

Electronic billing improves efficiency and saves time while also reducing error rates. Historically, bills have been delivered through the mail. The process of data entry and invoice-generation, putting bills in envelopes, mailing those envelopes, and then waiting for them to be received is a very time-consuming and labor-intensive process. While time-saving is a major benefit, the reduction of manual labor on monotonous tasks allows finance employees to focus their time on more strategic activities. The shift from paper-based to electronic bills also inherently creates better organization and results in fewer errors.


Traditional billing and payment methods relied heavily on paper and checks. This process made organization a difficult task with no clear system of record (SOR). Modern finance and accounting applications allow for digital SORs to exist for both the payer and the payee. Billing and invoicing systems often integrate directly with payment platforms, furthering the ability to keep a clean, organized SOR.


To recap, the benefits of e-billing include the following:

  • Time-savings and efficiency
  • Allows employees to focus on less monotonous and more strategic activities
  • Error reduction
  • Provides a system of record (SOR)
  • System integration

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Who uses E-billing?

E-billing adds efficiency to multiple business units, ranging from accounting to customer service. E-bills are generally created by the AR department, which acts as the payee, and are paid by the AP department or the payer. E-bills make it easy for accounting personnel to balance and reconcile the books and for customer service representatives to access electronic records and resolve issues.

What’s included in an E-bill?

E-bills typically look a lot like paper bills. In many cases, an electronic bill is merely a digital version of the physical bill, often presented in PDF format. E-bills generally contain all pertinent information that relates to the payment, such as date, amount, due date, and payment terms. In a fully electronic billing system, the e-bill will also contain a link or instructions to access a payment portal where the bill can be viewed and settled or paid.

E-billing vs. E-invoicing

E-billing and e-invoicing are related but not exactly the same. E-invoicing, or electronic invoicing, is a type of e-billing with a narrower definition or use case. Whereas e-billing encompasses the entire process of generating the bill and then submitting and receiving the payment, e-invoicing is generally a function of the AP workflow. The AP department, which is responsible for approving and processing supplier payments, uses e-invoicing to electronically process invoices and submit them to the system of record (generally a bookkeeping or financial solution such as an ERP or accounting software).

Self-billing and VAT

Self-billing is a unique type of e-billing where the payer actually generates the invoice or bill on behalf of the supplier or payee. Self-billing is sometimes used to expedite the AP process because it reduces the time that the payer must wait for the supplier to generate the bill. Certain supplier relationships exist where the payer determines the amount to be paid to the supplier; therefore, traditional invoice and purchase order workflows don’t apply. Online marketplace payments, royalties, and affiliate commissions are all examples of non-invoice spend. In these situations, self-billing is a fundamental component of the AP workflow, ensuring that a proper audit trail exists and making reconciliation less difficult. Self-billing is especially common in Europe and countries where payments are required to be supported by an invoice. In certain situations where a Valued Added Tax (VAT) is required, self-billing is beneficial to suppliers because it ensures that the payer is accurately assuming responsibility for the associated VAT.

Ebilling in the context of AP automation

E-billing existed long before the term “accounts payable (AP) automation” was coined. Electronic bills and payments exist within almost all automated AP workflows and help to streamline the invoice-to-pay process because the necessary documents are already digitized. A streamlined AP process has the capacity to handle bills and invoices whether or not they are digitized. Technology such as OCR (Optical Character Recognition) invoice processing allows the AP automation platform to digitize, process, and pay paper-based bills as well as electronic bills.

History of E-billing

While the exact origin of e-billing is unclear, the general consensus is that the advent of electronic billing coincided with the rise of the Information Age. During that time, the availability of computers and digital information systems transformed every function and department of business. The early phases of e-billing simply involved the transition from handwritten (or typewriter-generated) bills  invoices generated by computer. Widespread and fully digitized e-billing and e-payments came about much later as they leveraged the capacity of the Internet to complete the bill-to-pay process. The rapid adoption and implementation of e-billing is largely credited to the National Automated Clearing House (NACHA) Council for Electronic Billing and Payment (CEBP). The CEBP helped banks and utilities leverage Internet and telecommunication systems to allow payers to pay bills with e-payments and manage their billing information electronically.