“If your bank put fees up by 1.5% per transaction you’d be angry, and rightly so! And with the current uncertain economic outlook it is quite possible that high levels of inflation are likely to continue for some time, or even get worse.
“What’s the answer to this problem? Basically getting paid more quickly: slow collection literally affects the bottom line.
“But why are so many travel companies so slow in collecting payments? Far too many travel businesses are still using 1970s era legacy systems to collect payments, often arriving via old fashioned physical credit card payments or traditional bank transfers.
“In this day and age there is simply no justification for this! Of course you can always place pressure on partners to pay quicker, but the secret to really fast collection ultimately lays with a mixture of automated processes and the use of virtual credit card payments, what some call ‘VCCs’. This combination has the benefit of being more cost effective and time efficient too, for example doing away with painful reconciliations.
“Sadly the problem of poor payments technology is not just a problem when it comes to our currently high inflation. The peaks and troughs of COVID resulted in high levels of cancellations that caused chaos with such unautomated, old fashioned payments systems – and more generally an unoptimized payments system basically means you needlessly must have extra money laying around in your business to fund the gaps between paying out and collecting.
“So for anyone now just waking up and smelling the coffee we strongly recommend that you this as a wakeup call for your business! In this current climate of extreme COVID volatility and geopolitical uncertainty, who knows what’s next? Start getting paid promptly and free up your time and money to focus on what you do best: running a travel business.”
Spencer recommends that companies do the following things to get paid more quickly:
1. Have complete visibility of all transactions: reconciliations shouldn’t be time consuming.
2. Speed up your processes: no more twice weekly payment schedules, those days are gone.
3. Ensure everything is easily controllable: you need to be able to specify precisely the currency of use, where the transactions can occur, and control the dates on which transactions can be executed.
4. In short: automate all financial payments processes or you´ll forever be at the mercy of volatility.
Tags: Nium Travel
