Guided Tour of the New Small Business Invoicing Product from Wells Fargo

by Erin McCune on April 23, 2009

in B2B, B2B Payments, Erin McCune, Online Banking, Payables, Receivables, Wells Fargo

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Yesterday Wells Fargo announced a new online invoicing solution for its small business customers that positions the bank to compete against entry level accounting packages. I’ve tried it out and I am impressed: it’s quick, easy, and intuitive. This afternoon I spoke with Richard Weeks, Sr Vice President at Wells Fargo’s Internet Service Group, to learn a bit more.

Wells Fargo is not promoting the new invoicing solution heavily (at least not yet). Other than a press release, you’d never know it existed. The links to the new product on their website are subtle. It is mentioned at the bottom of the second page of small biz online banking services – four links from the home page! Let me help you find it: here. But, as a customer, I was able to easily enroll once I logged into small business online banking and scanned the left hand navigation (see picture).

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How it Works

Once the business owner/account holder signs up – review and accept terms, enter email associated with invoice delivery and confirm receipt of authorization code at that email – he or she can quickly and easily enter contact information and payment terms for each customer.

Creating invoices is a two step process, first you select the customer (or add a new one), assign an invoice number, PO number (if appropriate), payment terms (including early payment discount terms or custom terms), and late payment penalty (none or up to 2%). You can elect to have the service automatically send email payment reminders when the discount expiration date is approaching, when the payment due date is approaching, or when payment is past due. Then you can select from one of three invoice templates: product, service, or freeform. Customers can add their own logo to the invoice template.

The second step involves adding line items to the invoice. It is easy to add new items, either products or service types, as you are creating the invoice, without having to stop, save, go to the item master, and then return. (I wish QuickBooks was as easy!) The service calculates the subtotal for each item based on the quantity and there is check box to indicate whether each line item is taxable or not. Discounts, shipping, and tax can be applied as a percentage or a fixed amount (see picture).

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Wells Fargo’s customers’ customers (the payors) receive invoices via email as a PDF and can click on a secure link to pay by ACH or debit/credit card, if the business has a Wells Fargo merchant services account. The payor is directed to the new Wells Fargo Payment Hub. The Payment Hub was developed specifically for this product. Unfortunately, I did not actually see it (I suppose I could have invoiced myself).  From what I gather, the payor can make a one time payment via debit/credit card without registering, or register and enter payment information, either ACH or credit/debit card, that can be re-used on a recurring basis for future invoices. I was very pleased to learn that it is possible to pay an amount other than the original invoice and supply an explanation for the short pay or over pay, a critical feature for business to business payments.

Upon receipt, payment is applied to the open invoice. The overview page of the Wells Fargo Online Invoicing solution manages the business’ accounts receivables, showing a summary of current and past due invoices as well as the total amount paid thus far (see picture). It is easy to limit the view by date or by customer. Payments received outside of the Payment Hub – checks received via mail and deposited, wires – can be applied to open invoices manually.

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Pricing

Wells Fargo is offering a free trial for the first two months; thereafter Online Invoicing is $9.95 per month for up to 25 invoices. Additional invoices are 50 cents each.  Merchant services for credit card acceptance are priced separately but fully integrated into the payment hub.

Assessment

These are the things that impress me about this service:

  • It literally takes 5 minutes to sign up if you are already a Wells Fargo customer. You can create your first invoice in a matter of minutes.
  • Makes it easy to offer early payment discounts, a key means of accelerating cash flow in this challenging economy.
  • Automates email reminders, to encourage early payment, or follow up on late payments.
  • Payors can pay via credit card without registering with Wells Fargo, enabling frictionless one time payments. (The BofA service requires payors to register and create a username and password).
  • The Wells Fargo Online Security Guarantee covers payment transactions.

BofA has had a similar service for almost a year. The pricing is similar, as is the look and feel. Yet neither of these bank invoicing solutions has the Web 2.0 polish of Freshbooks (which is free for up to 3 clients).

The new invoicing offering, in conjunction with Wells Fargo’s small business bill pay, Direct Pay (ACH payment for employees and vendors), and WellsTAX offering, are a viable alternative to QuickBooks and other small business accounting packages for businesses that bank exclusively at Wells Fargo. The only thing missing is G/L and more robust financial reporting capabilities – if I were Wells Fargo, that’s what I’d be working on next.

Wells Fargo relied on a “variety of internal and external partners” to develop this solution, but would not disclose specific vendors.

6 Responses to “Guided Tour of the New Small Business Invoicing Product from Wells Fargo”

  1. Paul says:

    Congrats to Wells Fargo! They ‘get it.’

    Since they have the online banking relationship they’re in a privileged position to capture more workflows from the small business owner. And they seem to have made a simple solution for the very small invoicer.

    That said, I think their pricing will price them out of the market for the majority of small biz owners for whom this service would work.

    Three years ago Wells solicited input from potential vendors, including Intuit, on building this product. It’s been a long time coming. I’m glad they’re doing it but they need to speed their development cycles if they hope to make a dent in the market relative to the webby newcomers like Outright and Freshbooks.

  2. While reading through what this solution is a number of questions on usability that cross my mind. How small is the small business we are talking about? What if i am a small business owner and i am invoicing on an average 40-50 small ticket bill lines, would i enter those things for each of my customers? what if my customers are not the customers with wells fargo? What if i have a small billing solution myself and i generate my own invoices, can i upload them? What is the advantage i am getting by using the banks invoicing, i know it makes reconciliation easy at the bank’s end, but whats in it for me?

  3. Cenk Ipeker says:

    The solution is definitely a step in the right direction, especially on the reconciliation on the receivables and applied payments.

    For me the fundamental question remains on the fact that small businesses historically have had a low opinion of their bank and zero perception that the bank is a processing parter. will this be enough to sway the opinions?

  4. scacct says:

    I investigated this as a possible request for payment solution rather than direct invoicing. The goal was to eliminate direct online processing of credit cards and the pci requirements/penalties that are now beginning to be imposed by our merchant account vendor. The idea was that we would send the online invoice as a request for payment of an invoice we already sent the customer from our QuickBooks system. Then if they wanted to pay by credit card they could go to the Wells site and pay, and we would never have to get involved with managing customer credit card info directly.

    Unfortunately, the service is not designed to be used by a separate accounts receivable function. The login must be a signer on the deposit account. So if you have someone who only does billing and receivables and doesn’t have payables authority, you either have to give them a login from a signer or add them as a signer, and hence give them access to other online functions like bill pay, funds transfer etc.

    Also looking at the rates for the service, it looks like the rates would probably be somewhat more than our current pci penalties, and if our business grows it could become significantly more.

  5. scacct says:

    Just an update on this. We made an attempt at using it. It requires the person using it to be a signer on the account. It also requires an Authorize.net gateway account. An Authorize account is going to be in the $25 – $30 per month range plus possibly some setup fees. We already had an Authorzie account so there was no additional cost for us.

    At any rate, we could not get it to work completely. It would process the card on the Authorize.net site, but then it would fail when it tried to return to the Wells Fargo site. Unfortunately Wells Fargo customer service was of no help at all. I’ll spare the frustrating details but suffice it to say, when we called them, they were never able to answer our questions. Never. Not once. They always put us on hold for awhile and then got back on and said they would have to talk to development and call us back. They never called back. We finally gave up.

    My take on this is that there is a bit of a catch 22 going on. No one is using it so customer support is not getting any questions about it so when you call them they don’t know anything about it. I would be careful about committing to this as your only method of processing cards. If Wells doesn’t get enough participation they might just decide to pull the plug on it and put their resources into other products.

  6. Sara says:

    My question about this service is the fine print that my customer would possibly have to pay a fee depending on their payment method. What are the specifics on this, as Wells Fargo consistently fails to answer this question. I am a small business owner and my funds are limited, so I am looking for something cheaper than PayPal, but I certainly don’t want my customer to have to pay a fee to pay me.

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