Although outsourcing is one of the first actions an enterprise-size company might take to cut costs during a recession, according to a recent study by Warrillow, it’s just the opposite for SMBs. In fact, small businesses responded that they do not prefer to outsource during an economic downturn, but rather favor a sort of “batten down the hatches” strategy to have greater control over spending. But controlling expenses goes way beyond cutting the nice-to-haves, or what is considered superfluous during budget constraints. There are certain aspects of your company, which unless you’re planning on going out of business, have to be outsourced: Your payment processing. Whether it be your bank or a third party processor, as cash payments disappear, you need a payment processor that can take your customers payments (credit card, check, or other form) and turn them into cash. Which brings up the question: What are you paying to process your customers’ payments? Can you answer with certainty that you’re paying the lowest merchant account rates you could be? Take a look at the difference between paying 2.9% + $0.30 (PayPal’s rate for small business volume) vs. 2.28% + $0.24 (an alternative to PayPal’s pricing) on a month’s, or even year’s worth of credit card payments. It doesn’t take long for those extra few percentage points to add up.

Merchant Account Rate (MOTO) Monthly Volume Average Transaction What You Pay in a Month What You Pay in a Year
2.9% + $0.30 $10,000 $100 $320.00 $3,840.00
2.28% + $0.24 $10,000 $100 $252.00 $3,024.00

On a more thorough basis, what are you paying for your entire invoicing and billing process, internal or outsourced? When was the last time you added up your labor costs, invoicing material costs, and payment processing costs and compared them with other options on the market – options that could integrate and automate more of your invoicing, collecting, and customer communication than you ever thought possible? Cutting top-level expenses left and right is one way to go about recession-proofing your business, but you can also utilize this time to really take control of your business again. Do some research and take the time to resolve inefficiencies (which cause not so obvious expenses) that have been long ignored. As a result, you could discover a business that has the potential to be the well-oiled machine you always wanted it to be. _____ You can do it too. Read how other small businesses have experienced huge success by ditching some of their “old hat” systems:

“Our return on investment has been 60 days…” –Amanda Nichols, Director of Accounts Receivable, Peplinski Group, Inc.

“Weekly contributions have quadrupled…” –Sue Erickson, Executive Assistant, Origins Church of New York



PaySimple is the leading payments management solution for service-based businesses, powering the cashflow of over 20,000 companies nationwide. PaySimple builds long-term partnerships with companies to drive growth providing flexible payment and billing solutions and personalized customer service to suit their distinct business needs.

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