“You build your future. It isn’t handed to you.”
That’s what Francis J. Underwood, the ferocious political titan from House of Cards, would say about devising an effective payment strategy that promotes your business’s success.
He’s right. Success doesn’t just materialize. It takes hard work, dedication, and most importantly, a certainty that every single aspect of your business is working as effectively as possible.
Let’s be honest — you can have the most successful sales and marketing strategies devised by the best business schools, but if what’s happening behind the scenes — particularly your payment processes — isn’t helping your business get to where it needs to be, then true sustainable success will be elusive.
If you think that there’s more your payments processes could be doing to help your business win, here are three more key pieces of advice from Frank that you might find beneficial. I wouldn’t stand near him at a train station, but what he lacks in morality he makes up for with ceaseless drive to win—and that’s exactly the strength you need to craft a successful business payments strategy.
Be ruthless about doing away with inefficiencies
“There are 2 kinds of pain. The sort of pain that makes you strong, or useless pain. I have no patience for useless things.”
Far too many organizations operate under the mantra “because that’s how we’ve always done it.” That’s a terrible excuse for mediocrity. The world is moving fast. If you don’t think your outdated business practices are holding you back, consider this: once upon a time we relied on horses for transportation. Thank goodness we now have BMWs.
The facts are clear — if you rely on manual processes and paper checks, you’re at a competitive disadvantage and at risk for a cash flow crisis. The costs associated with clinging to old-school payment methods and processes are demonstrably frightening. Not only are they four times more expensive than other options, they make it impossible to take advantage of early pay discounts (Aberdeen notes that the average organization is only able to benefit from 66% of their contracted discounts due to inefficiency), they make you more vulnerable to risks, and they are generally unable to keep up with the demands of today’s business world. Just take, for example, the fact that legacy systems can’t handle international transactions efficiently because most countries outside the U.S. have their own ACH structures.
Still think that faithful old payments horse is the best way to get around?
Work with everyone, but trust no one.
“Friends make the worst enemies.”
Virtually every business these days is a global one, with 67% of corporates operating in more than one country. While a worldwide network of customers and partners is great for business, it also increases complexity and risk exponentially. Of course it does. The more payments you make and the faster you make them, the more you open your organization up to the risk of payment fraud.
The statistics that illustrate just how complex the global world of payments has become are staggering. According to the B2B Payments and Working Capital Management Strategies 2017 Survey Report, 66% of corporates originate payments with 3+ banks and 36% use more than 10 institutions. Additionally, 52% of corporates generate 10,000 or more payments/month, while 13% generate more than 10 million payments monthly.
It would be foolish to put on blinders regarding the risks that this frenetic flow of cash entails. It’s a constant battle and one that’s impossible to escape, as evidenced by the 65% of organizations that experienced payment fraud within the past 12 months. Geographic growth is undeniably good for your business, but as you expand you must remember that the organized criminals are hidden everywhere. Assume your organization will be attacked and defend yourselves accordingly.
Always be one step ahead of your competitors.
“For those of us climbing to the top of the food chain, there can be no mercy. There is but one rule: hunt or be hunted.”
The cut throat world of business is more competitive than ever before, with the difference between success and failure coming down to the smallest of details. Organizations that strive to outshine their peers will need to have the real-time visibility necessary to optimize working capital fully, compile data from multiple sources and comply with complex regulatory requirements.
So why then do 80% of corporates continue to use spreadsheets as cash reporting tools and 70% report using manual entry and projections for forecasting—despite having to compile information from numerous sources?
There may be many excuses for why these old-school practices persist, but there’s no good reason.
The simple truth is this: organizations that lack modern, flexible, efficient payment processes will be unapologetically eaten alive by their faster, digital competitors. If you fall into this category, survival will depend on deploying the right technology and systems for your organization. It’s a project no one wants to face, but one that will pay tremendous rewards in the future.
Now that the harsh realities are all out on the table, Frank has one more piece of valuable advice to offer:
“If you don’t like how the table is set, turn over the table.”
In short, make something happen. Do what needs to be done to get the result you want.
Now in fairness, Frank’s methods for solving this challenge would likely involve treachery, lies and deceit. But for you, creating a compelling and successful payment strategy is much less dramatic (and less messy). It can be as simple as deploying a centralized payment platform, otherwise known as a payment hub.
Because a payment hub is a single platform that can support multiple payment and product types, multiple geographies and all bank channels, it’s an ideal solution to break down the silos of legacy systems and outdated process that have been holding you back.
In addition to the long-term efficiencies and cost savings, a payment hub will also:
- Connect disparate legacy systems
- Centralize and standardize global payment reporting requirements
- Aggregate and automate domestic and international payments
- Serve as an API-ready solution for future digital transformation
- Provide stronger and more flexible security, audit, compliance and reporting capabilities
- Increase workflow efficiency for better cash flow management
Change is of course always uncomfortable. It’s expensive. It’s messy. And then there’s always the old fall back of “if it ain’t broke, don’t fix it.” But those are not the attitudes of a winner.
For your business to win, you’ll have to take control of those outdated payment processes and stop letting them control you.
So what are you waiting for?
Ed Adshead-Grant is an experienced Fintech expert in the global Payments and Cash Management industry, driving secure business payment solutions in ACH, Card, SWIFT, Faster Payments, Blockchain, Cyber Fraud & Risk Management and more.