Ad hoc payments are necessary for most mid-sized businesses (SMBs). These non-recurring payments are usually a significant source of revenue. Research from PYMNTS Intelligence found that ad hoc payments comprise 65% of SMBs’ accounts receivable volume. That’s a big chunk of a business’s revenue stream.
These types of payments can come in several ways, and they are usually a nice chunk of change that a company can add to its bottom line. Many companies rely on ad hoc payments to manage their cash flow, especially as more instant payment methods make it easy to access the funds quickly. But these instant payment methods come at a cost.
Many instant payment methods, especially ones processed by credit card, come with additional fees or cumbersome processing procedures. So, how can your company reduce costs and time spent processing these payments? Here are some ideas.
- Get an accurate count of your fees. The added convenience of receiving instant payment is big for SMBs. It’s why so many businesses are willing to pay a fee to use these methods. Research from PYMNTS Intelligence found that 7.4% of SMBs already pay fees for instant payment methods, and 35% are willing to pay fees for added convenience. But how much do those fees cost your business each year? Small fees add up, especially when they are charged again and again. SMBs need to take stock of their fee structure for instant payment methods and weigh it against the convenience and cash flow these methods offer.
- Improve your payment processing procedures. Since ad hoc payments fall outside of the regular payment structure, many SMBs have manual procedures in place for processing them. Manual methods can work great for one-off payments, but as the data has shown, ad hoc payments are a significant source of revenue for most SMBs. Manual processing of these payments wastes your company’s time and resources and can lead to costly mistakes. Utilizing technology and improving payment processing procedures to reduce manual processing is essential to making instant ad hoc payments more valuable for SMBs.
- Negotiate your fees. To lower costs, you have to be willing to negotiate to find the best deal. This may mean working with your credit or financial institution to lower fees for instant payment methods like credit cards or ACH transfers. To successfully negotiate lower costs, you must be prepared and have a good handle on your fee structure and payment processing needs.
Ad hoc, non-recurring payments are vital for SMBs. Instant payment methods that allow your business to receive and make these payments quickly are crucial to cash flow management. But to use these methods successfully, you need a strategy that considers your business’s needs, fee structure, and payment processing procedures. Then, you must use that information to negotiate for lower fees or better payment processing tools. That’s where we can help.
Our expertise is payment innovation strategy. We help businesses, especially in the oil and propane payment industry, find innovative solutions to reduce costs and improve their processes. With our help, you can take advantage of instant payment methods for non-recurring payments in a way that best suits your company’s needs. Call today, and let’s start crafting your business’s strategy. (617) 843-5700
