When setting up a business, there are so many critical administrative functions to consider that long-term thinking isn’t always a priority. Over time and with growth, the burdens these tasks place on you and your teams can become problematic. How much time are you wasting on inefficient processes when you could better spend that energy on tasks that positively contribute to the business?
Payment processing is one such troublesome area. From ensuring vendors receive payment on time to securing the revenue that needs to flow into your accounts, you might spend many hours a week processing payments. Although in-house management of expenditures can provide a sense of greater control, it can also sap energy and preclude opportunities to improve other processes—such as sales or marketing.
Should your business outsource processing to a professional third party? It can be a smart move that offers nearly many advantages. How?
Table of Contents
- Reduced Costs for Processing Payments
- A More Security-Minded Approach
- More Advanced Technology and Tools
- Comprehensive Solutions for Any Enterprise
- Faster, More Accountable Cash Flows
- Fewer Opportunities for Fraud Impacts
- Opportunities To Scale with Ease
- Maintain Rigorous Compliance With Security Requirements
- Hands-Off Maintenance and Upgrades
- Improved Business Reputation
- Consider Your Options Today
Reduced Costs for Processing Payments
At first glance, paying someone else to handle your payments might not seem like a smart way to reduce costs. However, according to a study by Deloitte, more than 70% of businesses outsource processes specifically because it reduces costs. Consider how much time you and your internal teams devote to payments. Next, also consider this: how much is your time really worth?
Are you spending so much time on repetitive payment processing tasks that other important work areas fall to the wayside? You may already incur hidden costs regularly. Putting this process into the hands of a third-party professional ensures timely payments at a price point that makes actual sense for your business.
A More Security-Minded Approach
Security in the digital age is a major challenge, no matter how big or small your business is. With bad actors and malicious software running rife, sensitive processes related to transactions can be a favorite target. When your business handles payments in-house, achieving a consistent and rigorous security footing is easier said than done. It’s not just about installing an enterprise-grade firewall and using strong passwords. Strict security protocols are a must-have to protect your business.
Achieving the right level of security is more manageable with help from an organization focusing exclusively on executing payments swiftly, safely, and securely. These partners can leverage far more advanced tools through their experience—tools you simply may not have the time to learn or the staff to service.
More Advanced Technology and Tools
Speaking of technology, it isn’t only advanced security where a third-party payment processor flourishes. With their knowledge and expertise, they can configure and deploy advanced software solutions that will not only make your processes faster but provide a greater level of visibility into key business information. With books that update automatically and access to other automation technologies that make tedious efforts such as invoice processing into a rapid effort, you can enjoy certainty in a clear snapshot of the company’s health at any given moment.
The improved visibility and accountability provided by these systems are worth the cost of making the switch to outsourcing in the first place. With numbers you know are always telling the truth, making intelligent business decisions becomes an everyday affair.
Comprehensive Solutions for Any Enterprise
The level of assistance you need or want from an outsourced payment processor might vary based on your business’s needs, industry, or several other factors. Don’t worry—businesses in this space understand that everyone’s level of demand is different. That understanding simplifies the process of finding a partner that can meet your level of need. There are options for everyone, from working in industries with extremely strict financial controls and compliance concerns to delivering “bare minimum” services to support a company during a labor shortfall or a period of rapid growth.
Faster, More Accountable Cash Flows
The cash flow into and out of your business is more than just the nature of doing business. Cash flow is your company’s lifeblood, and understanding the existing cash flow situation is vital for making smart decisions on any given business day. Not only does outsourcing ensure you have continuously accurate information about your cash flow, but a payments partner can lead to an important acceleration in this process.
You can pay businesses more swiftly, obtaining early payment discounts balanced with maintaining the appropriate level of liquidity. At the same time, incoming payments process and complete more quickly—so achieving that liquidity is not a consistent source of stress. With this setup, your business can make major decisions with agility.
Fewer Opportunities for Fraud Impacts
It’s an unfortunate reality: fraud can and does happen even with rigorous hiring processes and strict internal controls. The Association of Certified Fraud Examiners found that every year, companies lose billions of dollars to fraud—sometimes up to 5% of gross revenues. While not all fraud originates in payment departments, it is the space where the risk of fraud is often greatest. This simple crime of opportunity can be a major problem for your business.
Outsourcing the process to a team that you know you can trust removes these unwanted temptations from within the business. No one can commit check fraud if there’s no easy access to the checks and your bookkeeping. Put the lockdown on fraud with smarter services.
Opportunities To Scale with Ease
When your business grows, your payment processing routines may not always grow at the same rate. Handling this work internally means that increasing complexity demands more hands and eyes on the job—or else you can quickly fall behind. That risk can have expensive consequences if you miss payments or don’t collect on invoices promptly. Outsourcing, however, ensures that your partnership flourishes even as your business grows. A third-party processor can easily scale to meet different levels of need. Even if you only need a small amount of assistance today, they can stand by, ready to take over as much of the work as you need.
Maintain Rigorous Compliance With Security Requirements
Security isn’t just about protecting your business from bad actors—it’s also about meeting the requirements defined by the law. Depending on your industry, processing payments could involve handling a significant amount of PII, or personally identifiable information. A wide range of laws, both state and federal, govern how businesses must handle processes that could expose PII to the public.
Staying on top of compliance requirements isn’t easy when you already have so much competing for your attention. Luckily, you won’t have to worry with additional help—keeping you in compliance is a part of the job description. With good governance and oversight from your side, it’s the ideal match.
Hands-Off Maintenance and Upgrades
Today’s technology evolves at a breakneck pace; what was a gold standard a decade ago could be obsolete tomorrow. Staying up to date on the latest software systems—and maintaining those already in use—is an expensive and time-consuming task all its own. Can your business truly afford the costs of maintaining and eventually upgrading the systems you rely upon for payment processing? It’s not just a one-time effort, either; you could need to revisit these questions regularly. An outsourced partner handles all this for you instead—so you don’t need to think about becoming a CPA just to understand your accounting systems.
Improved Business Reputation
It is an advantage that is easy to overlook—but providing your clients with better, faster, and more responsive service marks your business as competent and savvy. That recognition can lead to a better business reputation, stronger vendor-client relationships, and other benefits. It all stems from the fact that other companies must struggle with the challenges of payments, too—so when you’re prompt in payments, it makes a difference up and down the chain. Others will appreciate that you’re on the ball, thanks to the tireless work of an outsourced provider.
Consider Your Options Today
In-house processing can make sense for small businesses starting out, but an outsourced solution offers more opportunities and better outcomes over the long term. How much better could your business be with access to these ten advantages? Consider your company’s financial footing and take a closer look at the idea of outsourcing today.
