Sample small business bill payment policies and procedures

Every small business – even one person firms where one person wears all the hats – benefits from having a well-considered bill payment policy. This sample policy is one that I drafted for a client with about $25,000 per month in expenses. The intent is to allow this to spark some ideas about how your own bill payment policy should be structured. We recommend using and customizing Bill.com to meet your exact needs. I am pleased to discuss the options. 

Bill payment policies and procedures for [my firm]

1. Control policies:

All payments require the approval of one of two authorized reviewers (the president or the treasurer) before payment.

2. Regular bill communications:

All regular communications about bills should be sent to [bill payment email address] .

3. Special issue communications:

Direct issues outside of the engagement, special requests or changes to bill payment procedure to tony@tonynovak.com or cell/text 856-237-9199.

4. Vendors with special treatment procedures:

(describe).

5. Payment time:

Approved bills are paid twice a month, approximately the 1st and 15th. More frequent bill payment is possible and may be considered on a case-by-case basis. Bills can be paid faster when necessary but there may be additional costs.

6. Uncashed checks:

Uncashed checks are tracked automatically and we manually contact the vendor after about a month. Procedures for voiding and recreditinguncashed checks are in place.

7. Vendor W-9:

Currently the responsibility for collecting W-9 and associated reporting is not included with the bill pay engagement and remains with management as a separate function.

8. Best practices:

• Verify vendor names, mailing address, telephone, account number and email address.
• Encourage vendors to submit invoices by email to [bill payment email address].
• Encourage vendors to receive payments electronically rather than by paper check.
• Respond to all communications from vendors, reviewers, and accountants quickly, in all cases within a week.

9. Standard message that we send to vendors (may be customized):

• “xxxxxxx pays its bills approved by its management twice a month, usually around the 1st and 15th.
• Electronic payment is strongly encouraged but not required. Additional costs may accrue to the business for the use of paper checks and replacing lost checks, so we discourage the use of mailed paper checks.
• We request the normal W-9 information from creditors and also request an email address. Billing communications are e-mail based.
• Bills and normal billing communications should be sent to [bill payment email address]. A copy of your account history, beginning xxxxxxxxx,  is available on request.
• Special communications and other issues can be directed to Tony Novak at 856-237-9199 or email tony@tonynovak.com.
• We use Bill.com to manage payments. Your business can also use a limited version of Bill.com without charge to send or receive payments or track payments you’ve made. Ask Tony Novak for more information.”