When companies are new, they often find their hands filled just delivering their goods or services to their customers -- their methods are likely to be ad hoc and err on the side of being “just good enough,” because that’s all they can manage in the near term. Employees have to wear lots of hats, and a certain looseness goes with the territory.
But it doesn’t take too long for companies to realize how important it is to examine their business processes to find potential efficiency gains and root out any subpar methods keeping them from being agile, both now and in the future. “That’s the way we’ve always done it” doesn’t work anymore, if it ever did. The most effective business methods change too quickly, and the competition is just too fierce.
Business processes that put your company in front
Why are business processes so important for productivity and efficiency? For one thing, by definition, the parts of work they examine are repetitive -- the goals and steps workers need to accomplish over and over, with as few mistakes as possible. Shaving off just a bit of time or effort can quickly add up to big gains, as can lowering the number of mistakes by even a percentage point or two.
Second, looking at business processes sets you up for even more productivity gains in the future. Understanding them now makes it possible to modify them in the future, in other words. A process that’s complicated and hard to explain is also harder to change, since no one has put in the effort to figure out how it ever could be changed.
How payment solutions bring efficiency
It’s all too common for longstanding manual or semi-manual payment processes to become essentially broken over time. There may be too many places for payments to get stuck, and it’s usually hard to get data when you need it – reports become as prone to bottlenecks as the payments themselves are. Again, given how many payments the average company has to process, just a few hiccups in the process can quickly become huge, companywide drains on productivity.
And every little issue can drag down your bottom line, especially if it’s been a while since you’ve investigated your process and looked at all the potential costs: time spent tracking down the duplicate invoices you got because the first ones were lost, approval processes that are too complicated to be followed, early-payment discounts you never manage to get, the late-payment fees you almost always do get, and much, much more, including the difficulty of preparing for an audit or all the other essential record-keeping a growing, thriving business requires.
Payment solutions can lead to big gains much more quickly than other business process management improvements. After all, payments are often handled dozens or even thousands of times a day, so that even small improvements can rack up big gains in productivity and agility.
Payment solutions to the rescue
Payment solutions can bring several potential benefits. Here’s a quick guide to the most essential features and capabilities and the benefits they have to offer:
- Flexible APIs: Payment solutions with highly adaptable APIs let companies remain agile and adapt, integrating with new services and providers as they arise.
- Data-rich payment descriptors: It’s now possible to include many more characters of description and general data with a single transaction. This can help you understand your customer better, and it can help everyone better understand just where the money’s going.
- Real-time payments: “Rails” (core banking systems) that allow for payments to be debited and credited instantly greatly expand a payment system’s potential. To take just one instance, RTP can help avoid late payment fees and let companies keep their money for longer.
- Automated scheduling and reconciliation: Services like these can go a long way toward making your accounts payable department more efficient, cutting down on everyday errors and bottlenecks.
As they assess their payment processing and other methods, companies may also want to look into the ways that outsourcing could also improve agility, giving them access to the newest systems without having to revamp their back office or their IT department.
To find out how payment technology can help you create better business processes and gain agility download the white paper: 'How to improve agility in business with payments and financial technology'.
January 4, 2021