Every year, an increasing number of businesses make the decision to outsource their payment processing to someone with a greater sense of expertise. Though making the choice to change any component of your business will obviously require some reorganization, the many benefits of outsourcing your payment processing systems will likely be worth it in the long-run.
Payment processing is an absolute necessity for businesses of all kinds. While it will be up to the management team to generate revenue streams over time, these potential sources of revenue will be functionally worthless until they have actually been processed. Anything that can help your business decrease costs, increase efficiency, and improve your financial operations will undeniably be worth looking into in the long-run.
In this article, we will discuss some of the most important reasons why businesses have increasingly decided to outsource their payment processing. The payment processing system that makes the most sense for your business will depend on the size of your business, the complexity of your operations, and your different sources of revenue. By taking the time to understand the potential benefits of outsourcing, you can create a unique and specialized system that works for you.
Access the Benefits of Specialization
The most obvious reason that your business would want to consider outsourcing payment processing is—as is the case with other systems you could outsource—making the choice to outsource gives you access to the benefits of specialization. Unless your business already specializes in payment processing, then there is likely someone else who is much more familiar, much more experienced, and much more capable of producing ideal outcomes.
The best payment processing services will be able to offer you higher quality statements than you’d be able to create on your own. Invoices and other payment statements will create a lasting impression on your customers. Working with someone who knows the right kinds of ink, paper, envelops, and watermarks to use will establish a significantly greater sense of professionalism.
Furthermore, because these specialized payment processing centers operate on an economy of scale, you will be able to access the benefits of specialization without having to endure an increase in monthly expenses. These companies will have the proper equipment needed to create mass amounts of statements. They will also be able to drive down the cost of creating a specific statement due to the fact that they are able to purchase all consumable goods (paper, ink, envelops, etc.) in bulk.
Improve Your Monthly Bottom Line
In many situations, you may find your business in a situation where you can either access the benefits of specialization or save money over time. However, as you can see, the payment process industry is rather unique and will actually be able to offer you the best of both worlds. Being able to save money while also improving the quality of your statements means that outsourcing your services has very limited opportunity costs.
Though results will vary, a typical business can expect to save more than $1 per every payment statement that they issues. These savings come from the decreased cost of equipment (especially if outsourcing saves you the cost of an industrial printer), decreased cost of labor, decreased costs of consumables, and even decreased cost of stamps. Being able to lower your monthly expenses without any obvious loss in revenue will result in your business immediately improving its bottom line.
Improve Customer Satisfaction
No matter what industry your business may operate in, making sure that your customers are continually satisfied is very likely a top priority. Without maintaining a strong degree of customer satisfaction, retaining old customers and attracting new customers will both be significantly more difficult for you to do.
Fortunately, by accessing a payment processing and statement issuing specialist, there are many different ways that you can make your customers more satisfied in the long-run.
- Allow your customers to have access to both paper and electronic statements. By using both systems, you can easily allow your clients to easily access their outstanding balances, know when a payment is due, and help them review previous payment statements.
- Increase efficiency and accelerate the payment process. Waiting weeks—or even months—to process an outstanding payment can potentially result in various problems (including bounced checks). Payment processing specialists can help you be assured that your payments are taken care of within a much shorter time frame.
- Guaranteed security. The last thing you would want as a business is for your customer’s financial information to ever be in a vulnerable position. By working with a payment processing specialist, you can increase security both online and through the mail.
Professional payment processing systems also helps project a greater sense of class and professionalism. This is particularly important when dealing with personal financial information and you want your customers to feel as if they’re taken care of.
Improve Employee Productivity
If you currently manage your payment processing in-house, you are likely not only paying more on a per-statement basis—you are also enduring a significant opportunity cost. From an economic perspective, the money and time you are spending on processing your payments would likely be much more productive if it were redirected somewhere else.
Hiring someone to manage your payment processing in-house is almost always an economically inefficient decision. Hiring an additional employees will cost you thousands of dollars per year, and you will still need to endure the per-unit cost of issuing payments.
Furthermore, while you could insource the payment processing work to someone who is already employed by your company, unless this person is a specialist, you will be making their time much less productive than it could otherwise be. For example, every hour that a manager spends tracking, entering, and organizing their payment records is an hour that could have been spent on a more financially productive activity. By outsourcing your payment processing to someone who is a specialist, you can allocate your in-house talent to where it can be used most effectively.
Keep Your Payment Information More Organized
There are also a number of different organizational benefits that can come from outsourcing your work. Maintaining a strong sense of organizational excellence will ultimately make it much easier for your business to make important decisions as time goes on.
- Track customer payment patterns over time. By being able to identify the average amount of time it takes for you to get paid (and other relevant patterns), your business will be able to generate more accurate cash flow projections.
- Review previous payments when necessary. Whether there is a dispute with a customer, you are unsure if someone has paid, or anything else, it is certainly quite valuable to have access to previous payments all in one place.
- Manage returned mail as it comes in. Instead of needing to organize all incoming and outgoing payments, this process can be easily outsourced.
These are just a few of the commonly cited benefits of changing. Depending on the nature of your business, there may be even more.
As a decision-maker in your business, you should always be looking for different ways to improve. Though payment processing is likely just a small component of what your business does, it is still a process that is very important. By taking the time to recognize the benefits of outsourcing your payment processing, you can immediately begin to establish an authentic operational advantage.