Having the BPAY reference allows the payment to be made in part payments and if there is an amount outstanding when due, that outstanding amount is all that needs to be paid. I know this for fact as we do it here at our house on a fortnightly basis towards rates, water, insurance, and when we had TPG we did it for that. Generally for a customer the BPAY reference for these sorts of bills does not change. Registration BPAY references tend to change each year. Paid in full by the due date means that the total amount (no matter how it is broken up into payments) is paid by the due date.
Currently we are around $600 ahead on our water after our last bill which was two weeks ago, so it does work if consistency is maintained.