Payment processing costs can be one of the biggest revenue drains on a business. In fact, according to a recent report published by the Aberdeen Group, the average cost for processing a single payment is $10.55. And 42 percent of the executives who participated in the study said that automation was “a key step to improving financial management.”
Does this mean it is time to stop printing checks? Maybe. But that means you have to deal with the time and costs that come with changing your entire system. It also means would have to find a way to deal with vendors who do not deal with electronic payments. Instead of taking on the giant task of revamping your processing system, why not consider outsourcing? Here are three of the best reasons why you should do so.
Lower costs
Cutting expenditures means more cushion for your bottom line, plain and simple. And outsourcing your payment processing needs can do just that. One way it does this is by freeing up your skilled labor force to focus on projects that can earn your company money. You will likely pay your processing service less per hour than the employee who was previously doing that task.
Also, you won’t have the hassle and expense of overhauling an entire system. Your service can take the task of handling all your paper and electronic payments — not to mention the cost of implementing and maintaining two entirely separate types of payment systems.
Smoother transactions
Your payment outsourcing company can streamline all your accounts payable transactions, making for smoother transactions with your vendors. They can also communicate with your vendors directly and accommodate all of their payment requirements. For example, you may have vendors who still only deal with paper checks, but more clients who only take electronic payments. Your payment processing service can accommodate both of these in a timely manner. And you’ll only pay for the services you use, rather than paying a huge fee to house and use both types of software systems within your organization.
Higher levels of expertise
Payment outsourcing companies hire and train people who know their business. They are well-versed in government rules and regulations of payroll, including taxation and withholdings. In other words, they know what to look for to ensure that your company flies under the IRS radar. They are also trained to know all the ins and outs of accounts payable systems and they’ll know how to be thorough and accurate in their transactions. This knowledge can save you headaches and well-earned revenue by preventing common mistakes that are often made in payroll processing. They are also able to produce the most accurate and detailed records for your financial reports, investor statements, and budget forecasting.
In addition to financial expertise, outsourcing your payment processing needs comes with an entire team devoted to your company’s security. This means you have an added layer of information protection you might never have expected. These types of institutions have extremely tight regulations on both their employees and their systems. They have entire teams of cyber specialists and auditors who protect your information at all times. This is a security level that can’t be matched in most companies, since most small to mid-sized businesses don’t have the resources to hire large, focused teams to strictly manage data protection.
Cost savings, added protection, and smoother transactions are the biggest reasons to consider outsourcing your payment processing. But those aren’t the only benefits. The added peace of mind in knowing that trained professionals are taking care of your accounts payable is well worth the investment.