Each year, businesses of all shapes and sizes make the decision to outsource their payment processing duties. According to research recently published by Deloitte, 78 percent of businesses in the world “feel positive about their relationship with their outsourcing company.”
The same study also goes onto cite that cost-cutting, focusing on core components of the business, and solving capacity issues are the top three reasons businesses make the decision to outsource. While outsourcing can be done for almost any task your business does not specialize in, payment processing has gained an increased level of attention.
As long as payment processing remains an essential component of your business, you may be able to benefit from making the decision to outsource. In fact, business process outsourcing (BPO)—which includes payment processing—is commonly cited by KPMG as one of the most frequent forms of outsourcing there is.
Even if the benefits of outsourcing payment processing may already be apparent, your business may be unsure where to turn next. In this article, we will discuss how your business can benefit from making the decision to outsource and the components of payment processing that can be outsourced. We will also discuss how to determine which payment processing firm is right for your business.
Why do so many businesses make the choice to outsource payment processing?
When you started your business, you did so with a specific vision and area of expertise in mind. If your business is like most others, payment processing was an afterthought, rather than an essential component of your business. As you began setting up payment portals, QuickBooks, APIs, and other essential components, you quickly realized you were in over your head.
According to Statista, the global market for outsourcing grew from $45.6 billion in 2000 to $104.6 billion in 2014. By working with an experienced payment processing firm, your business gains access to pre-existing infrastructure, expert advice, and an ability to streamline your internal processes. Your business will also be able to save the amount of time and effort it takes to process a single payment.
With additional time and money in hand, your business can focus on whatever it does best. No longer you will have to take time away from profit-generating activities in order to manually enter payments by hand. Once you have your payment processing system entirely put in place—a process that typically takes 2-5 business days—your business will be able to operate more efficiently and pursue its long-term goals.
Which components of payment processing can be easily outsourced?
The term “payment processing” is used to describe every step of the payment cycle, ranging from delivering the initial bill to when all funds appear in their designated accounts. Most businesses have payment cash flows moving in both directions. Not only will you need to make sure all accounts receivable come to fruition, but you will also need to make sure all vendors are being paid on time.
In most cases, both types of payment processing can be automated. Setting up recurring payments to contractors and vendors using automated check software will ensure you never miss a payment again. Additionally, your payment processing partner will be able to ensure that all incoming payments actually come to fruition (offering multiple payment options, creating synchronized books, etc.). Both of these types of transactions will have a positive impact on your bottom line.
Additionally, utilizing an Application Programming Interface (API) will make it easier to access, control, and automate all payment processing functions from a single location. API represents an organized set of protocols, designed to make the entire payment process much easier. CSV Application Programming Interfaces also make it much easier for your business to integrate the entire system into a single location and continue operating as planned.
How do I know when it is the right time for my business to hire a payment processing partner?
There is no single “moment” when your business will need to make the decision to outsource. Rather, this choice is often made as a consequence of many “little moments” that have built up over time. If your business is financially hurting as a result of dealing with payment processes, then it may be time to make a switch.
If your business could spend more time each week focusing on revenue-generating tasks (sales, outreach, etc.), how much better off do you believe you will be? In order to know where your business should begin the process of outsourcing, it will be crucial for you to identify where your biggest bottlenecks exist. Once you can quantify where your business is bleeding and where your business is being held up, the correct outsourcing decision should be a bit clearer. As your business scales up, modifies its business model, or makes other significant changes, it may be time for you to reevaluate your operations.
How do I determine which payment processing partner is right for my business?
Once you have decided that outsourcing is right for your business, you will need to decide which company you should work with. In addition to variables such as cost, client reviews, and website usability, you will also need to consider whether the prospective firm is the right fit for your company.
The best payment processing outsourcing services will be able to offer scalable solutions for your business. For example, in the short-run, your business may simply need a check printing and mailing service. In the future, however, you may want to add additional services such as full API integration or automatic payments. Working with a partner that allows you to only pay for what you need in the status quo—while also being able to make adjustments in the future—will put your business in a position to succeed.
Payment processing is something few businesses are familiar with and can almost always be enhanced by being delegated to professionals. As long as your business is aware of its current wants, needs, and goals, you should be able to find a partner that can meet your needs. For more information on outsourcing solutions, contact SmartPayables at (720) 287-0030.