One of the least favorite tasks in operating a business is paying bills. The need to track, manage, and service incoming bills often detracts from the business owner's focus on building her business. As a result, many business owners rely on a bill-payment service to manage their outgoing payments. In addition to managing bill payments, a bill-payment service can prevent late-payment penalties and even save money on bills by taking advantage of early-payment incentives from vendors.

Choose a name for your bill-payment business that will be both unique and memorable. Ideally, your business name should convey some positive quality that you'd like to have associated with your business. For example, "Secure Bill Payment" might suggest security in a way that "Dave's Bill Paying Service" doesn't.

Register your new business name with your Secretary of State's office.Operating a business under any name other than your own given name requires a Fictitious Name Registration with your Secretary of State. (See Resource 1 for a list of Secretary of State office websites nationwide.)

Visit your city hall or county courthouse to obtain a vendor's license. States with no sales tax, including Montana, Alaska, Oregon, Delaware and New Hampshire, do not require vendor's licenses.

Write a business plan that includes a description of the range of bill-paying services that you'll provide, a summary of who will use your services, an analysis of competing businesses, a marketing plan, a financial plan, and a projected budget for your first three years of operation.

Develop your own system for tracking and making payments on behalf of your customers, or consider purchasing client-bill-payment software such as BillPay or PPS bill-payment software (See Resources). Using ready-made software will help you better serve your clients and allow you to focus on finding customers.

Create a secure place where you'll store your client's checks, invoices, payment records, etc., as well as the reports that you'll provide to each of them. Checks especially should be kept in a locked safe or security box, and a locking file cabinet will keep confidential records secure.

Determine how much you'll charge for your service. You can approach this by determining how much money you'll need to earn per month and then estimating how many clients you'll need to reach that number, or you can contact similar services and inquire about their fee structure.

Design a brochure that introduces your service and describes the benefits that you have to offer your customers, such as timely payments, improved cash flow, late-payment penalty avoidance, and early-payment discounts. Include your contact information, phone number, email address, website, as well as your starting terms and ongoing fees.

Design business stationery and envelopes that will help you to present your service in as professional a manner as possible. Major office supply chains such as Staples, Office Max or Office Depot have standard stationery packages which meet most businesses' needs.

Mail a letter of introduction stressing your bill-paying service's security and convenience, along with one of your brochures, to all of the businesses in your area that may be prospective customers. Mail your letters in small batches to allow time for you to follow up with them.

Follow up your letters with personal telephone calls to each prospective customer. You may want to offer a special "no risk" offer such as a month of free service to entice new customers to give your service a try.

Arrange with your new customers how bills will be delivered to you. Will they be brought to you? Will you pick them up? Or will you be going to the post office to collect them?

Accompany your clients to their banks to be added as a signatory on their checking accounts. Then request a list of current vendors and suppliers from each of your customers as well as any special instructions they have when you receive their checks.

Provide a monthly statement of bills received, bills paid, and bills pending, for each of your customers, so that their accounting can be updated and so that they know exactly which obligations have been met and which remain outstanding. Note any payments that saved your customer money by early payment.


Don't forget to pay yourself at the end of each month based on the services you've provided.