What is the real cost of manually processing credit cards and checks?

In most businesses the process of accepting payments from customers remains a largely manual process, and in many cases a process where multiple individuals are involved. This is true of payments made by check, credit card, wire transfer or even cash.

To understand the real cost of accepting a payment we need to look at the payments from when they are received to the time the funds clear the bank. This process can be divided into three steps: accepting the payment, reconcilement, and preparing/delivering the deposit.

Accepting Payment:

Accepting a payment requires considerable employee time. If a payment is by check, someone has to receive the mail, deliver it to the accounting department where someone will open an envelope and then must match that payment to an invoice. If a payment is by credit card, someone will have to take the customers credit card number (a potential security risk), key the credit card number, expiry date and amount of the payment in to a credit card terminal (physical terminal or Internet based Virtual Terminal), and then write down the Authorization number received.

Reconciling the Payment:

Once a payment has been received, it needs to be reconciled with an invoice in the accounting system. In some cases this process may be preformed by a different person than the individual that accepted the payment to begin with, opening up the potential for inevitable and costly data-entry errors. If the payment is by credit card, a capture or settlement function needs to be performed to inform the credit card networks to move funds from the customer’s credit card to your merchant account – in most cases this is another manual process.

Depositing the Payment:

Once a payment has been received and reconciled, funds need to be deposited in a bank. For check payments, someone will generally have to physically go to a bank and deposit funds. Payments via credit cards have the advantage of an electronic transfer of funds from a merchant account to an associated deposit account.

So far, we can see that these manual processes are time consuming, next Friday we’ll talk about how Paytelligence can cut down on time and money spent when accepting payments.

Would you like to see a demo of Paytelligence?

Call us and schedule a demo today!
604-282-6000.  Ask for Rob McKay.

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Don’t miss next Friday, more Paytelligence.

And this Wednesday, we’ll have more about Webtelligence.

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Have a great Friday!