(Originally published January 30, 2011 in Small Business Computing)
What are Integrated Payments Solutions?
Integrated payment solutions are tools that your business can use to integrate accounting, customer relationship management (CRM) and other business applications with payments processing. By integrating payments processing with business applications, you can save time and money, reduce errors and get a better view of your business.
Why Should You Care?
Every business wants to get paid — and get paid faster. But if you are manually entering and reconciling payments with accounting, CRM or other solutions, you are wasting time with redundant data entry, and increasing the likelihood of human error. At the end of the day, you’ll probably need to spend even more time reconciling these errors so that the information is correct in both systems.
When you integrate payment processing with your business solutions, you can achieve the following:
- Save time and reduce errors, by reducing time spent on redundant data entry and credit card verification, reconciliation and so on.
- Save money. Time is money! In smaller companies, where one employee often wears several hats, you can re-allocate time spent on re-entering data or re-verifying credit card information to more important tasks that can help your business get ahead.
- Gain more financial visibility and control. When you integrate payment processing information with accounting or another business solution, it’s automatically recorded in that solution, providing you with better visibility and the capability to create more up-to-date and accurate reports.
- Improve cash flow. By closely monitoring payments, you can reduce days’ sales outstanding (DSO), and speed up the process to post receivables and improve cash flow.
When you process credit and debit card processing, there are also important security benefits. Using an integrated payments solution from a PA-DSS (Payment Application Data Security Standard) certified vendor ensures that all exchanges of payment data are secure and PCI compliant with PCI security standards, which mandate that businesses safely encrypt and store PIN numbers, CVV2 numbers and magnetic stripe data.
What to Consider
While the benefits of integrated payments solutions are clear, payments processing is often a confusing topic, for several reasons. Vendors offer solutions that tackle different pieces of the payments pie, and integrate with different software solutions and brands. Some require that you use their merchant service provider (which allows businesses to accept debit or credit card payments), while others let you choose.
Ideally, you’d might want a payments processing service that integrates everything — your accounting and CRM software, every form and method of payment you process today, and any you might conceivably want to process in the future—such as accepting payments on a mobile device. Oh, and you’d also want it be affordable on a small business budget.
A few vendors are working to develop comprehensive payment platforms for small business, but most integrated payment solutions available today tend to be point solutions. These solutions integrate a particular form or forms of payment — such as a check or credit card—using a specific device, such as a virtual terminal or a check scanner.
With that in mind, here are some recommendations as to what you’ll want to consider when considering integrated payment options:
- Where are your highest transaction volumes coming from — credit card, paper checks, PayPal? For many small businesses, checks and/or credit cards make up the bulk of transactions. Wherever this is in your business, this is also where you probably are spending the most time verifying, re-entering and reconciling data back and forth with accounting and/or CRM. Automating and integrating the process here will provide the biggest payback.
- What business application(s) do you most need to integrate with payments? Most companies start with accounting, because the controller or treasurer wants to not only take time out of the process, but also reduce errors and time spent reconciling payments received with invoices. But many companies also want to provide sales with a secure way to take orders, generate invoices, and accept, verify and track payments within CRM. In both cases, it makes sense to start solution evaluation with the business solutions vendors you already work with. Almost all of the major accounting and CRM vendors in the SMB market, such as Intuit, Microsoft, Salesforce, Sage, etc. have their own and/or partner to provide integrated payments solutions for their business software.
- What level of integration and automation does the solution provide? This varies among integrated payments solutions offerings. For instance, does the solution pre-authorize, automatically accept or decline payments? Does it securely encrypt and store credit card info so that you don’t need to spend time re-entering for repeat customers? Does it print receipts, send email notifications to customers, and post back to accounting, CRM or an order fulfillment system? You may need some, all or even additional functionality.
- Is the solution PA-DSS certified? PA-DSS (Payment Application Data Security Standard) certification means that all exchanges of payment data are secure and PCI compliant–particularly important for processing credit or debit card transactions.
- Can you choose your merchant service provider, or do you have to use theirs? Since credit card processing rates differ, and really add up if you process a lot of transactions, it’s important to find out if the integrated payments solution vendor requires that you use their merchant services, or if you can choose your own. Either way, you’ll want to make sure that you get a fair rate.
You should also think about our future business needs, and if you will need to process payment types that you currently aren’t dealing with — such as mobile payments. Look for solutions that already have these capabilities, or have them on their roadmaps so that they’re ready when you are. Integrated payments processing can help you reduce costs and improve efficiency. It’s worth it to research the options and select a solution that will help you reach these goals.
What a great article – and timely since I know a lot of small businesses grappling with various integration issues. Payment solutions is just one area to address but definitely the first!