As recently as 2019, business checks were a common in business-to-business (B2B) transactions. Despite their limitations, many small-to-midsize businesses (SMBs) had been reluctant to switch to digital payment models. However, the COVID-19 pandemic accelerated the pace of change in the world of credit card processing. Because so many businesses had to transition to a virtual workforce, digital payments became a necessity overnight, with 76% of SMBs reporting the pandemic prompted them to enhance their digital transaction capabilities.
Now in 2022, there is a burgeoning new sector known as fintech, which represents the integration of technology into financial services. There are many new digital payment solutions, standards and best practices, and the integration of payment processing with accounting software is one of the most important among them. It works through enterprise resource planning (ERP) software, which integrates and streamlines the day-to-day management of all business functions, from accounting to sales and marketing. Integration of credit card processing with accounting has set a new efficiency standard that makes it difficult for SMBs to compete without ERP.
An advanced business degree in ERP can give professionals the knowledge and practice necessary to excel in today’s fintech world.
Innovation in Payment Processing for Smaller Businesses
COVID-19 accelerated a transition for SMBs that had already been undertaken by larger enterprises more than a decade ago. Then, those systems were complex and required expensive hardware and IT departments for technical implementation and management. They were simply out of reach for smaller businesses. However, since the development of cloud infrastructure and its ability to help users maintain, update and secure business software, ERP has become the new operating standard for SMBs. Now, smaller businesses can purchase complete business software that is affordable with a subscription model and doesn’t require on-premises hardware or an IT department.
Today’s ERP accounting and finance modules work in tandem with the internet of things (IoT) digital transaction devices, allowing SMBs to handle digital and in-person transactions. These ERP financial solutions go far beyond simply processing payments, adding valuable features that simplify financial operations and even reduce the need for accountants. These include invoice processing, approval workflows and cash flow forecasting.
How Does ERP Assist With Transactions?
There has been a dramatic change in customer payment preferences. Nowadays, B2B and business-to-consumer (B2C) businesses must offer customers a variety of payment options, so accepting credit/debit cards, mobile payments, gift cards and even PayPal and Venmo payments is a necessity. Additionally, accounting professionals use to have to wait for batch reports from their payment providers and manually enter every transaction into their accounting software. Manual data entry also created a higher risk of human error, which impacted financial reporting and account reconciliation. ERP automates these processes and reduces or eliminates redundant data entry.
What Does Digital Payment Processing Integration Mean for Businesses?
Today, payment transaction data through multiple sales channels automatically posts in accounting systems, regardless of payment type. Customers can make payments in retail stores with a credit card scanner or cross-borders using different currencies. These systems automate the integration of all transaction activity. Fewer hours and accounting personnel are necessary, as there is no need to manually enter transaction data or reconcile accounts.
The enterprise resource planning finance and accounting software enables businesses to automate or streamline other formerly complex and time-consuming tasks. These include safeguarding customer payment information, setting up recurring billing, as well as generating reports and having visibility of the entire accounting process in real time. ERP solutions also shorten time frames for registering invoice payments and assessing cash flow status. In short, digital payment integration with robust accounting and financial software allows SMBs to run their operations and manage their cash flow much more cost-effectively.
The MBA in Enterprise Resource Planning Online Develops Experts in Digital Finance
Lamar University’s online Master of Business Administration in ERP program provides core business skills while focusing on technology platforms and data analytics to integrate all facets of a business or organization. With courses in managerial accounting, financial management, ERP E-Commerce and more, the program helps graduates gain the ability to implement modern best practices for transaction processing and much more, using state-of-the-art software and tools.