To Build or Buy – That is the Question

November 8, 2017

  • BLOG


Running a business successfully comes with its fair share of operational obstacles. Analog billing and payment systems pose a high risk for issues that prevent businesses from getting paid which impedes growth. Switching to an electronic billing system can easily remedy these issues by allowing companies to distribute bills and accept payments digitally. The world of electronic billing can be overwhelming, but when you analyze the choices there are really two main options: to build or to buy. The question might seem simple, but there are pros and cons to each option and many factors to consider when making the decision.

To Build

Building an electronic billing system requires designing and developing a program from scratch. A team would work to build and maintain the program. The system would need to meet any compliance standards and financial regulations, and be updated as these requirements change.

The biggest advantage of building an electronic billing system is that it would be 100% customized to the needs of the business. The day-to-day billing needs of every business varies based on how its run and what its customers expect. By building a custom billing and payment system, the intricate and specific needs of your business can be addressed, and the system can be updated as time goes on.

On the other hand, building a solution is resource intensive. The timeline for implementing a custom billing and payment system is long – sometimes taking more than two years. Dedicated staffing resources are needed for conceptualizing, designing, developing, and deploying the program, which might require hiring programmers. The system would require constant maintenance and updates to ensure compatibility with other programs used to organize billing and payment data. Marketing efforts are needed to make sure customers are aware of the new payment option and use it. When you add up all of the time, money, and energy that goes into building a billing and payment system, it can end up being rather costly.

To Buy

The other option is to buy software from a third party vendor. There are a lot of bill pay software companies out there with solutions range from basic and broad functionality to specialized features for niche markets. The work for this option is essentially to research various vendors and their solutions and select one to implement.

The main advantage of buying a billing and payment solution is its cost effectiveness. There is no plan and build out time needed so the implementation timeline is much quicker than building a solution from scratch. The vendor you choose will have a team to do the heavy lifting so there is no need to hire new staff or dedicate extensive IT resources to the project. Typically, billing software providers consistently update their programs for maintenance and new regulations, keeping their customers’ systems compatible and complaint. In many cases, vendors will also provide marketing tools to help get your customers to view and pay their bills online.

The downside to purchasing billing and payment software is that it is ‘off-the-shelf’. Since it is created and controlled by another company, it cannot be as customized to your business’ unique needs. The vendor is creating and selling its product to fit the needs of its many customers, so if your business needs to change something, the reaction time would be longer than if you controlled the billing system in-house. You might also run into issues with third party integrations to other systems that affect billing data.

Luckily, there is a way to counteract some of the disadvantages of buying an electronic billing system – finding a quality vendor. If your needs are clear cut, find a vendor that specializes in billing for your industry. For more complicated needs, look for a vendor with a comprehensive solution that can be scaled up or down to tailor to what your business needs. Make sure that the solution integrates with a wide variety of other billing systems so that it compliments what you’re already doing, not make more work for your billing department. Find a vendor that understands your regulatory and compliance needs. Finally, choose a vendor that will continually provide technical and marketing support so you get the most out of the solution.

So, what’s the answer to the question: To build or to buy? Well, there simply isn’t one absolute answer. Small businesses don’t have the same needs and resources as larger enterprises. Consider the opportunity costs associated with building or buying a billing and payment solution. Can your company afford the time it takes to build out a program? Are the business needs too specialized for an ‘off-the-shelf’ solution? Consider your own company’s situation and billing needs, and you’ll find the right solution for your business.

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