For example, my bill for my ATT UVERSE DSL and Cable TV will generate on the 28th. I know how much the bill will be. I just logged into my account to go ahead and make the payment and it says I can’t because no bill is due. Also, when a bill is due, i’m not allowed to make a double payment and therefore have it out of the way for 2 months. The same applies to my cell phone bill through TMobile.
My utility company, however, will let me pay more than is due, and apply the overpayment on subsequent bills.
Is there a business reason why some companies wont allow this?
I am not sure why you would want to overpay or pay in advance, but you can set them up to automatically bill to a credit card, and then you could put a credit balanace on the card, and that would work.
First and foremost, a credit on your account is a liability on the company’s books. Some beancounters don’t like liabilities. In spite of the fact that this liability will be temporarily offset by cash in the bank, until it’s been offset by your bill…
Additionally, I know for certain that AT&T charges a non-insignificant “service fee” for late bills, IIRC it amounts to 3-5% of your bill total. That’s a much better return on their money than putting it in a bank.
Because it’s unearned income and it shows up as a liability on their books.
$20 doesn’t sound like much to you but if a thousand customers do this the company now has $20,000 on the books of unearned income which is a liability that decreases the profitablity of the company
From working in a payment processing centre, one reason I can think of is that there is no amount to apply your payment to if you pay before you are billed. The money can be applied to your general account, but when you start putting money on people’s accounts without specific bills to apply to, it can get awfully messy and hard to follow and straighten out in a big hurry. It’s much easier to follow “Billed for $45 Jan. 5th on invoice 555212 - paid $45 Jan. 20th. on cheque #123 (or internet payment XXXXXXX)” than “Added $45 to Account X Jan. 4th - have to remember to go back into account at later date and apply it to appropriate invoice if you can figure out which one it is since customers don’t always pay the exactly right amount and many customers pay for more than one invoice on one cheque or payment.” Also, some programs don’t allow you to add an amount to an account without a balancing entry, which you can’t make if the invoice hasn’t been generated yet.
I’ve made a double payment to AT&T accidentally through my bank’s billpay (I don’t think It’s Uverse or really know what that is). Obviously that’s a different issue and they can’t refuse until after they have my money, but it went through and my next bill was a few cents.
I think what the OP is seeing is just a missing feature of the payment site. The database doesn’t have an unpaid bill in it, so the software either doesn’t show the Make Payment link or gives an error when you click it. But, as thelurkinghorror says, if you get the money to them a different way, you will owe them negative money until the next bill.
I once overpaid my car insurance by mistake and they sent me a check back because it was at the end of the policy year. But if I pay too much during the year they are OK with that.
They can make a lot more money by hitting you with ‘late fees’. So they don’t allow you to pay in advance, thus having a short time period where you can actually pay without incurring late fees. A certain percentage of customers will forget to make their payment during this time, so the company makes extra money on the late fees.
I live in Australia, and routinely over pay, or pay early, my electricity/phone/internet etc. Never had a problem with it. I wonder if there are laws here stating that companies must allow it.
Markxxx is correct that it will show as a liability on their books, but it does not decrease the profitability of the company. The liability will show up on the Balance Sheet and be offset by an equivalent asset (e.g., cash), so it is a zero-sum game for the company. (Income Statement items are the ones that impact profitability.)
I agree the reason is most likely to increase the number of “late payments” and associated fees. One work-around might be to pay your bill through your bank’s online payment system, if available. Issue a payment to AT&T (to your account number with them) for whatever amount you want. They will take it.
That is how I pay my bill. But it won’t allow a payment in excess of the amount due. And it wont allow a payment until you get a notification saying “your bill for (month) is ready”.
I suspect it has to do with wanting to collect late fees.
This is a little different than what I have seen - it sounds as if AT&T is sending your billing information to your bank. You then select and pay that specific bill through your bank’s online system.
Does your bank allow manual payments? You may be able to enter in the payee information manually (i.e., set up AT&T as a manually payee) and have the bank issue either an electronic payment or a paper check. Add your account # to the memo field and you should be OK. This is analogous to putting a check in an envelope with instructions to credit your account # and mailing it to their billing department.
In other words, you would not be paying a specific bill but rather applying money your account. When doing this, you could pay whatever you wish.
Banks take in the money from you and forward it to the company itself electronically. Once your money reaches the company, they still need to figure out which invoice to apply it to.
I don’t like banks any more than the next person, but I really don’t think this is all late fee related - large companies that are processing thousands of payments every month are more concerned with keeping payments and invoices straight than they are with jerking you around for late fees.
I don’t believe that at all. If so, getting late fees removed because the bank made a mistake would be much easier. They woudn’t run through the bills before they credit you with deposits, even if the deposit was made the day before. Or hold on to your bills, putting through the ones that make you overdrawn fastest so they can charge a late fee on each of the others.*
Banks are specifically set up to maximize late fees.
*Let’s say you have $50 in the bank. You make a $1 purchase, a $20, a $10 and a $35, before realizing that you didn’t have enough for that. The bank will not put them in in order, as that would only get them one late fee (for the $35). They will take the biggest ones out first, allowing them to charge you three late fees (for the $20, $10 and $1). I learned this the hard way.
Not in the US, but it’s the usual way in Europe. I fill in a document telling my debtor to charge me at bank account such-and-such-number (properly signed, of course, which nowadays can be done via e-signature) and they do. The bank knows how much to pay because the debtor is telling them; they know it’s ok to pay because they have my authorization on file (the debtor sends it with my first bill at the latest).
Most people also get paid the same way, by e-transfer. Every time I move to the US I feel like I’m stepping back to the 50s, money-management-wise.
This is nothing like the situation we are talking about. Your example is analogous to using the merchant’s bill pay service, except having it withdrawn via EFT instead of paying with a credit card.
What is being discussed is a bank’s bill-pay service, which basically does nothing more than mail a check to the merchant at the customer’s request. Many banks will have relationships with large vendors so that this payment is made electronically, however my customers that pay me through their billpay end up getting a check sent on their behalf from their bank.
