How Smaller Companies Can Leverage Payment Systems To Drive Growth
Company leaders have a natural inclination to batten down the hatches when they suspect an economic storm is approaching; that goes for large enterprises and small- and medium-sized businesses (SMBs) alike. Taking preventative action now can help you ride out a rough period and emerge ready for growth when the storm subsides.
Keep in mind that the operative word is “action.” Business leaders might choose to put some projects on hold in times of economic uncertainty to conserve cash, but businesses should be doubling down on efficiency and growth. Therefore, moving forward with investments that can streamline and simplify core processes, improve cashflow and deliver a better customer experience makes sense for businesses of all sizes.
Improving cashflow directly correlates to your payment systems. Using advanced payments technology can also facilitate more efficient operations and drive growth by delivering a better customer experience. Here’s a closer look at steps SMB leaders can take to maximize cashflow and position their companies for growth, no matter what the economic climate.
Conduct an internal process review
The first priority should be a thorough process review to identify ways to streamline operations and save money. For example, take a look at processes around accounts payable and accounts receivable. Does the payment system you use to transmit and receive payments create records automatically, or does it require manual data input? Are records created in the company enterprise resource planning (ERP) system automatically, or do AP (Accounts Payable) and AR (Accounts Receivable) processes require manual intervention to record transactions? Look for ways to streamline those processes with automation.
Consider upgrading a legacy ERP system
During your internal process review, you may find your ERP systems need an upgrade. Many business owners are surprised to discover how many manual processes exist within their day-to-day operations. In addition, it’s often alarming to learn how dependent companies have become on ad-hoc, work-around processes that are only documented inside the heads of the individual process owners that manage them. As a result, businesses have been taking advantage of the opportunity to consider switching from outdated, legacy on-premises ERP systems to cloud-based ERP or are making plans to do so as part of their digital transformation roadmap.
Cloud-based ERP systems typically allow businesses to operate with greater agility and flexibility. The ability to easily integrate data with other business applications — including payment systems — is one of the core advantages of a cloud approach. In addition, on-premises ERP systems typically need to devote a greater portion of their ongoing spend to maintenance and annually required upgrades of existing systems – rather than on future forward enhancements. Business owners should evaluate the ongoing cost of maintaining legacy systems and calculate the opportunity cost of not being able to easily adopt options like advanced payment systems, which can streamline processes and improve cashflow.
Assess the customer journey
It’s also a good idea to assess all of your customer-facing systems and look for ways to improve the experience from the customer’s point of view. Payment systems have a direct impact on the customer journey as well as internal processes. Think of payments as a strategic asset that can help you drive more sales and increase customer loyalty and be on the lookout for touchpoints where automation and expanded payment options can remove friction to accelerate revenue activation.
Tap expertise specific to your payment system needs
If you determine that you can gain efficiency by modernizing your payment system, make sure you work with a payment system provider who understands your industry and is capable of orchestrating payments within a modern ERP system. You’ll have a range of payment providers to choose from, and their capabilities and support levels vary widely. For example, some of the most well-known payment providers are essentially offering a self-service product, leaving critical tasks like ERP integration up to the user. To get the maximum benefit from your payment system transformation project, make sure you find and deploy the expertise you need.
Focus on the most profitable activities for your business
SMBs that leverage technology to streamline back-office activities and consistently deliver an exceptional customer experience will receive an added benefit: more time to focus on profitable activities. That’s a huge bonus that automation delivers across the board — you gain labor hours that used to be devoted to data entry and other manual tasks and can redirect that time to high gain initiatives that drive more revenue, generate more customer loyalty, or transform the business.
One thing that both SMBs and larger companies have in common is that they are dealing with rapidly evolving customer expectations. That’s true if you sell directly to consumers or to other businesses. Buyers in the B2B world are consumers too, and they expect the same seamless customer experience they receive as consumers when making purchases on behalf of their employer.
When people talk about the “Amazon effect,” they’re usually referring to the pressure other retailers feel to deliver products quickly and offer free shipping. But the effect extends to a seamless payment experience too, which is offered not only by Amazon but also other tech-forward product and service providers, including ride-hailing apps like Uber and Lyft. Customers don’t even have to think about payments, which happen automatically.
Customers know a good experience when they see it, and their expectations have changed because they now understand what’s possible. Larger companies have invested in the technology that allows them to accept the payment methods their customers prefer and securely store preferred payment account information so that they don’t have to provide that data again every time they make a purchase.
It’s also an expectation that companies have access to their transaction information so they can answer questions about purchases at any touchpoint and resolve any disputes that arise. Businesses that meet those expectations will build customer loyalty and gain a greater share of the consumer wallet while streamlining internal processes at the same time to operate more efficiently.
When sophisticated payment systems first emerged, larger businesses tended to be the early adopters because they had the resources to invest or the staff to internally develop them. Now smaller businesses can get the same benefits when they adopt advanced payment technology. Leaders of smaller businesses can take charge and build more certainty in uncertain economic times by assessing and upgrading internal and customer-facing processes, leveraging expert advice, and focusing on value-generating tasks. Taking action now can drive efficiencies, devote a greater portion of ongoing spend to future-focused initiatives, and grow and cashflow in any economic climate and come out poised for growth when the economy inevitably bounces back. There’s no time like the present to build your future.
By Young Upstarts | https://www.youngupstarts.com/2023/06/05/how-smaller-companies-can-leverage-payment-systems-to-drive-growth/