Back to articles
Poor operational efficiency impacts everyone in your organization — especially when it comes to payment processing. Hiccups, delays, or unnecessary red tape could prevent your business from making the most of its time, effort, and, most importantly, incoming funds.
Modern organizations lose up to 30% of their revenue due to poor operational processes and their lingering inefficiencies. And with more than 25% of the workforce’s productive power lost to drag, complexity, and confusion, it’s safe to say your business is losing more than you may think.
Unfortunately, the problem of operational inefficiency in payment platforms has become more pronounced in recent years. Rising costs and increased competition have subverted the playing field, complicating the process of keeping an existing business afloat. If a newly launched business fails to integrate effective processes, it may face a difficult — if not impossible — road to success.
In a time of inflation and economic uncertainty, making improvements to your operational efficiency matters more than ever. This is particularly impactful for financial or payment teams, many of whom find it difficult to maintain speed, resilience, or control without a modernized payment platform.
This guide explores the power of operational efficiencies in combination with modern payment platforms. After defining all terms and possible obstacles, you can browse multiple solutions and advantages for your team.
Let’s get started.
What does operational efficiency mean?
Operational efficiency refers to the efficacy, speed, or sustainability of a company’s business processes. These are typically a collection of ideas that help to drive a company’s mission and ensure all tasks are completed as intended.
You can measure operational efficiency using a simple formula:
(The cost of an operation + Cost of goods sold) ÷ Net sales
Say you own an e-commerce company with very few expenses. After the end of one year, you add the cost and value of your operation and divide it by the number of sales to calculate your operational efficiency.
You sold 200 products and made $30,000. The cost to manage your website was $5,000, and the cost to make your goods was $10,000. This means your formula looks something like this:
(5,000 + 10,000) / 30,000 = 0.5, or 50%
Most businesses strive for an operational efficiency ratio of 50% or less, meaning your e-commerce company is operationally efficient — for now.
You may notice the formula for operational efficiency looks similar to return on investment or ROI. However, ROI uses a separate formula focused on specific adjustments rather than an entire process.
You should use the formula for ROI if you want to measure the impact of a specific campaign (like how much you saved with a new payments platform).
Alternatively, you should use the formula for operational efficiency if you want to measure the three factors that impact operational efficiency.
Let’s take a look at all three of these below.
Understanding the factors that impact operational efficiency
It’s important to align all layers of your business operations to maintain a sustainable and performant business. There are three major factors that impact operational efficiency:
- Resource utilization — How effectively are you utilizing the resources at your disposal? This could include human capital, tools and equipment, or financial assets.
- Manufacturing — How well are you producing the products or services offered by your company? This could refer to speed, volume, or even transportation and logistics.
- Inventory management — How well can you track the resources at your disposal? This includes customer-facing elements like products and services, as well as internal factors such as listing price, stock levels, and supply chain contracts.
Each of these three factors must be aligned internally to support a performant and sustainable outcome. In fact, failure to align these factors to your existing payment platform could create a number of inefficiencies that reduce the output of your business.
Modern challenges with operational efficiency in payments
Sending, receiving, and managing funds does not always appear complex in the beginning. But as businesses start to scale and expand, the capacity, volume, and value of their payment transitions can quickly increase in complexity.
Not having an effective payment platform can lead to a number of challenges. According to recent statistics, only 12% of organizations are satisfied with their current platform, citing issues with time-consuming processes, poor customer support, and even some inefficiencies that lead to a direct loss in revenue.
A few of these payment process inefficiencies include:
- Slow or paper-based payments. Some companies struggle to make the switch from paper-based payments to digital infrastructure. In fact, the vast majority of B2B payments remain paper-based checks — 81% of businesses rely on paper checks to pay other firms in their network. Failing to integrate properly with digital-based payments could reduce operational efficiency, tie up incoming revenue, and slow down the remittance or reconciliation process.
- Complex cross-border payment processes may require an unbalanced amount of time, effort, or internal support. It may be difficult to remain abreast of international guidelines while maintaining an efficient forex process. Moreover, sending mass payouts to more than a few recipients could require hundreds of labor hours and cost thousands in external fees.
- Poorly integrated tech stacks could produce confusion for both internal and external stakeholders. Employees may struggle to remember the correct payment processes for individual platforms, while customers or partner firms may report challenges with navigating interfaces.
It’s clear a single hiccup in your payment process efficiency could create significant obstacles between your brand and its goals. This is one of the many reasons why improving said efficiency is a critical component of long-lasting success.
Let’s take a look at these efficiency improvements below.
Methods of improving operational efficiency with your payment platform
The best payment platforms have the power to impact all three factors affecting your operational efficiency. Not only can they assist with resource utilization rates, but they can also help you better understand your manufacturing costs and streamline inventory management through clear and intuitive processes.
Let’s look at more specific ways payment platforms can help your business maintain operational efficiency.
1. Integrate your payment platform with all points of sale (POS)
If you run a growing business with multiple points of sale, you’re well aware of how difficult it can be to train employees or set expectations with customers. You may have to balance several vendors with different payment processes or rely on manual data-entry tasks that take hours of time away from employees.
If you don’t want to enter digital payment data manually or risk inviting human error into your accounting applications, you can turn to an online payment platform to connect all your existing platforms into one. This prevents you from wasting time on mundane tasks and ensures your existing tech stack can safely transmit information.
With Runa, merchants can accept nearly any form of digital value through online checkout pages or a simple POS integration.
2. Optimize your customer’s checkout or payment process
Today’s customers expect a great deal from your payment processes and have little tolerance for confusion or limited payment methods. Online and in-person transactions that don’t support multiple forms of value are likely to be panned by prospects or leads.
Upgrading to a more effective payment platform can help you amplify customer experiences without adding unnecessary confusion. Buyers can enjoy a more intuitive payment platform with access to thousands of different disbursement types or values.
If you partner with a provider offering white-label services, you can even customize your checkout process with your logo, brand colors, or preferred wording.
3. Replace your paper processes with digital statements
Manual payment processes could reduce operational efficiency by a significant degree. Complex invoices may cost up to $40 each, while smaller manual financial tasks may cost up to $15 per task.
Digital payment platforms reduce a great deal of this complexity. You can avoid the introduction of human error, reduce time spent completing manual paperwork, and streamline the completion of critical tasks like accounting, auditing, or payment reconciliation.
4. Make mass payouts that simplify daily tasks
Payment processes that require mass payouts could be very time-consuming for your team. Manually sending individual payments may not be feasible in all circumstances, especially if you need to send money to hundreds or even thousands of recipients.
Payment platforms like Runa can instantly automate this process by automatically sending funds to any number of recipients. You can monitor the safe landing of your payments with our tracking system, let recipients choose how they want to receive their payment, and then use a rich data dashboard to understand key metrics.
5. Build reward and loyalty systems for customers and employees
If your business wants to remain competitive in the marketplace, it needs a reward and loyalty system to engage internal and external stakeholders. More than 90% of companies have one of their own, although their initial execution and ongoing management appear overwhelming to growing brands.
Thankfully, newer companies can rely on online payment platforms to streamline the construction of their cashback, engagement, or recognition systems. With Runa, you can send gifts, loyalty points, gift cards, and even cryptocurrency all at the touch of a button.
6. Streamline your customer-facing refund systems
More than 30% of products purchased online are eventually returned — which means having a slow-moving or ineffective refund system could alienate a large portion of your customers.
Hundreds of customers have used platforms like Runa to design an operationally efficient refund program. Not only can you send real-time reimbursements to customers all over the world, but you can also automate the entire process and significantly reduce in-house accounting work.
Keep in mind that 75% of customers intend to purchase more from businesses with a sustainable returns process, which includes digitally backed infrastructure without an extraneous need for paper. Runa can provide all this and more.
The benefits of payment platforms on operational efficiency
You now understand the many use cases of payment platforms for operational efficiency. However, you may want more concrete examples of how switching to a new payments platform could tangibly improve your business processes.
Let’s take a look at the most compelling of these, beginning with the most obvious.
1. Minimize complexity
Payment processes are often so complex that they eclipse the productivity of your existing workforce. Digital programs come with a much smaller learning curve and are easy to use for accounting professionals at all experience levels.
2. Reduce errors
Human error is the number one contributor to major financial errors. Utilizing an automated platform like Runa can help you avoid possible touchpoints and alleviate unnecessary risks.
3. Connect processes
Integrated tech stacks have considerable value for growing brands and enterprises. Connecting your online payments process to other daily-use tools could create a system of value that optimizes existing efficiency.
4. Expand markets
A good payments platform doesn’t just enhance your existing process — it can also help you scale into new international markets. Integrating with Runa can help you convert currencies on the go, allowing you to send funds to more than 30 countries in 18 currencies.
Partner with Runa’s online payment platform to enhance operational efficiency
Payment platforms are an effective way to improve the operational efficiency of your business. From reducing confusion and streamlining tasks to breaking down barriers with automated capabilities, the future of lasting business success lies with performant and adaptable payment systems — including Runa.
Runa is a payments infrastructure platform designed to transform the way companies manage digital value. We offer both pre-built systems and a documented API to help business owners create operational processes that suit their needs and expectations.
You can rely on Runa to build embedded systems for multiple payment processes, including mass payout, reward, and incentive experiences for customers and employees. Since you can easily send and receive digital value in any amount and to almost any location, you can empower your business to scale uninhibitedly and remain flexible for what comes next.
Learn more about Runa and the solutions we offer by contacting our team today. Curious to learn more on your own? Sign up today and take a look for yourself — getting started is 100% free.
