Outsourcing your payment processing is one of the best ways you can quickly improve the operations of your business. In this article, you will learn 7 of the most common reasons businesses choose to outsource their payment processing functions.
As a business owner, you are likely looking for ways to improve your organization. While closely examining your income statement and looking for ways to reduce expenses can be productive, this is only the beginning of a very thorough process.
Instead of solely looking inward for possible solutions to your current challenges, your business may want to expand its search and look outwards by engaging in business process outsourcing. Before deciding whether to outsource, you will need to carefully weigh the costs and benefits.
1. More Time in the Work Day
When you are making any operating decisions for your business, it will be in your best interest to do so using an opportunity cost framework. Because there are only so many hours in each workday, every minute you spend dealing with tasks outside of your area of expertise is a minute taken away from other portions of your business.
If you could replace the two hours each week you spend processing payments with two hours making sales (or some other profitable endeavor), your business’ bottom line will immediately improve. By outsourcing, you can focus on the activities that move the needle most in your organization.
2. Reduced Cost of Payment Processing
Cost is typically the reason businesses are hesitant to outsource, but—as you can already begin to tell—this concern doesn’t really hold up on paper. In fact, in addition to the positive impact on your bottom line the comes from saved opportunity costs, the best-outsourced payment processing companies will also save you money on a per-unit basis.
Because these specialized companies operate via an economy of scale, the initial costs of creating a payment processing system can be diluted across their entire customer base. As these companies grow, the marginal costs of processing a single payment will decrease. This is especially true for companies that still do a large portion of their payment processing on paper, where costs such as ink and paper can be reduced by buying in bulk.
3. Increased Sense of Professionalism
Maintaining your client relationships and providing a consistent sense of professionalism goes a long way. With outsourced printing services, you can add several professional touches that would otherwise be out of reach.
Incorporating your logos into invoices, customized check templates, sending confirmation messages following each payment, and using stylized documents and templates are just a few of the ways these payments can be immediately improved.
4. Added Security
Any time you are discussing payment processing, security will inevitably work its way into the conversation. Losing financial information or exposing yourself to fraud will disrupt your monthly cash flows. It can also severely damage the relationships you have with vendors and clients.
Professional payment processing services are able to dedicate the time and measures necessary to assure all financial information remains secure. Whether it is increased levels of cybersecurity for electronic payments or added security measures (special envelopes, thermochromatic ink, etc.) for paper check payments, these companies have the resources needed to keep your business protected. After all, it is always better to be safe than to be sorry.
5. Access to Advanced Technology
Due to their specific area of emphasis, payment processing companies are often willing to invest in the technology and infrastructure that most business owners are unable to purchase on their own. Beyond simply working with QuickBooks, these companies can help you set up systems where your books will be updated in real-time.
By ensuring that your books are accurate, validated, and constantly up to date, it will be much easier for your business to make objectively beneficial decisions. Whether you can or cannot afford to do something (such as expanding your business) can be easily influenced by a single transaction. Once your bookkeeping and payment processing systems are entirely up-to-date, you’ll be glad you made the initial investment.
6. Personalized Payment Solutions
By working with a specialist, it becomes much easier for you to offer personal touches to each of your vendors and clients. For example, some may want to be paid via a paper check, others may want access to their accounts via the cloud, and others may have specific requests that extend beyond your wildest imagination.
Instead of tediously tracking down your payment partners and trying to gather this information yourself, these tasks can be easily outsourced to a professional service. Due to their extensive level of industry experience and pre-established protocols, these services can help you get a personalized payment system off the ground and running in a matter of days.
7. Accelerated Cash Flows
In order for your business to achieve a state of financial well-being, it is crucial that all cash flows—both incoming and outgoing—are managed in a timely manner. As time goes on, the risk of accounts receivable (and accounts payable) falling through the cracks will steadily increase.
There are quite a few ways professional payment processors can accelerate cash flows. Setting up instant transfers will help assure all money is exactly where it needs to be. Additionally, having a company that can collect on accounts receivable will save you from some awkward conversations with clients.
Conclusion – How to Outsource Your Payment Processing
With each passing year, an increasing number of businesses have made the decision to outsource their payment processing to companies with more experience and expertise. The benefits of outsourcing these services are numerous and wide-reaching. Though you should still conduct an internal analysis before making any final decisions, it may finally be time for you to make a change.
Ready to find out how outsourced payment processing can help your business? Contact the payment processing experts at Smart Payables at (720) 287-0030 or contact us here.