Five Ways Companies Outsource Payment Processing Functions
One of the most commonly outsourced components of a business is its payment processing functions. Payment processing often involves having to pay attention to an overwhelming number of details and many businesses have found that it is simply easier to pay someone else to take care of it. We take a look at five different ways that companies frequently choose to outsource their payment processing functions and how making the decision to outsource can benefit a company over time.
1.) Check Printing and Mailing
Naturally, making sure that your employees are getting paid in full and on time is one of the most important duties you have as a manager. Without a system that can efficiently print, distribute, and report your employee’s checks, you will immediately run into problems that can be potentially detrimental to your business.
Check printing and mailing services are usually pretty straightforward, but there are several different security features you should keep an eye out for when comparing different service providers. Some of the most important security features include thermochromatic ink, chemical sensitivity, visible fibers, sequenced inventory control numbers, and numerous other security features that can protect both your business and your employees over time.
The best check printing services will also offer a variety of different customizable features as well. Details such as your company logo and individualized notes on the checks are among the most frequently used customizable options. Using outsourcing services for checks is often even more secure than choosing to do this in house without having to sacrifice any of the personal components you value.
2.) ACH and Direct Deposit Automation
Though distributing paper checks is perfectly adequate for many businesses, others prefer to take advantage of developments in technology and use a much more modern approach. Through the use of ACH (Automated Clearing House) and direct deposit automation, your company can pay its employees without having to use any paper checks or even direct wire transfers.
There are many different benefits of using an automatic payment system. While uncashed paper checks can often create cash flow uncertainty for certain companies, a direct deposit system is much easier to predict and keep track of. Additionally, many managers have applauded the paperless system for its many security measures as well as the fact that it is objectively better for the environment.
The National Automated Clearing House Association (NACHA) is responsible for governing the electronic movement of money in the United States. Generally, you will have the option to choose between two types of services: NACHA File Generation and NACHA File Automation. The former being a partially managed solution, and the latter being fully done for you service.
3.) Statement and Printing & Mailing
There are many statements and documents that businesses use in addition to their employee’s payment information. Some of the most common documents include invoices, financial reports, tax information, patient statements and others. Many businesses have found that their time is best spent when focused on other tasks. Statement printing and mailing services help businesses save time by reducing the management, overhead and resources spent distributing documents in-house.
Other frequently printed (and distributed) materials include marketing materials, company announcements, and general information that is useful for company shareholders. Whether your company is public or privately run, there are certainly many people who will want to be kept in the loop. Usually, if your company is able to outsource larger amounts of work at once, you will save a significant amount of money on a per-unit basis.
If your business is involved in the medical industry, then, you will want to make sure that the company you choose to outsource your work to has been certified and trained with HIPAA (Health Insurance Portability and Accountability Act). This protects your business from future legal liabilities and also helps assure that everything is reported correctly.
4.) Address Cleansing
If your business has moved offices, and is a frequent user of the United States Postal Service (USPS), then you will want to use an address cleansing service to ensure proper mail delivery. Address cleansing is the process of making sure that all of your addresses are accurate and 100% compliant with the preferred standards set forward by the post office.
An example of address cleansing might be changing an address that says “Suite 500” to USPS’s preferred abbreviation “STE 500.” Though this may seem like a bit of a semantic exercise for some people, address cleansing can actually be very important for your business. Not only does this make your address book much more uniformly organized. It also removes any potential confusion at the post office and makes it much more likely that your mail will be delivered to the correct place and delivered on time.
5.) 1099S, W-2s, and Other Tax Documents
Dealing with tax related materials is one of the most frequent sources of headaches in essentially every major industry. While many managers will outsource their tax reporting responsibility to an accounting firm or other tax service, they will overlook the need to outsource their printing and mailing tasks as well.
Fortunately, there are many high-quality services that will help your business print, copy, and mail everything related to your taxes in a way that is guaranteed to be secure. The most commonly used tax forms are 1099s. The best outsourcing services will be able to easily handle these as well as most of your other tax form management needs. Making sure that your taxes are turned in on time is very important for all businesses. Tax deadlines are rigidly enforced and, if ignored, can cost your business a significant amount of money. Having a reliable partner you can trust to take care of things can make a tremendous amount of difference.
Ultimately, specialization is the natural outcome of seemingly every competitive economy over time. No matter what industry you may be in, your business has been able to succeed because of its special ability to provide a product or service that the market demands. Taking the time to outsource your printing, payment, and mailing services to a company that focuses on these specific things can help your business continue to spend its valuable time on what it does best, serving your niche.
SmartPayables is a trusted provider of outsourced accounts payable solutions for businesses and large organizations. For more information about our services, or to get a quick, 5 minute quote, call (720) 287-0030 and speak to our in-house experts.
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