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Forefront eNewsletter

Q4 2016 EDITION

A New Year's Resolution that Will Increase Profits: The Transaction Optimizer

Profitability is likely an area most firms want to improve in 2017. Most firms will spend significant time acquiring new clients in the hopes of increasing their bottom line. This approach should not be discouraged, but it can be time consuming and eat away at profitability faster than it contributes. One option is to lift up the hood and look for easy-to-implement cost savings.

When it comes to reducing expenses, the accounts receivable process can offer quick and easy cost savings. Specifically, payment processing costs, which are often overlooked. Law firms that process a substantial amount of credit card transactions often pay thousands of dollars a year in processing fees. So, how do firms tackle the challenge of reducing this significant expense? Meet the Transaction Optimizer.

If your firm processes credit cards, implementing a transaction optimizer should be a new year’s resolution. Credit card processing rates are determined, in part, by how much information is provided to the credit card company. This process is built into the software provided by the credit card processor. And it makes sense.

Card brands love data, and the more information a user supplies (credit card number, expiration date, verification code, billing zip code, etc.), the less chance there is for fraud related to the transaction and the less cost that’s associated with the transaction for the processing company. What some firms don’t realize, however, is that there’s much more data that can be sent to the credit card processor to get even lower rates, including merchant commodity code, invoice numbers, tax information, and even shipping dimensions and weights.

For firms, entering this redundant information is time-consuming and can lead to data entry errors.  With the help of a transaction optimizer, these data points can be seamlessly sent along with all transactions, lowering processing rates significantly. In fact, when transactions are optimized, firms can see reductions in processing rates of a full percent. Depending on the volume of transactions, this can save firms thousands of dollars in transaction costs.

Outside of the obvious cost savings, your back office team will experience a great deal of time savings associated with automated data entry. This time savings is enhanced if your firm offers clients the ability to pay their bill online. Not only does this eliminate data entry errors by your accounts receivable team, but it integrates your clients into the optimization by requiring specific transaction data. And if you use a credit card swiping device, your costs and time savings could be greatest of them all.

Implementing a transaction optimizer and automating the data sent to the credit card companies should be a first-quarter goal of any firm looking to increase their bottom line early in 2017. You may find that your costs savings are equivalent to acquiring a new client, which gets you off to a great start in the new year!

Client Pay

ClientPay provides integrated payment processing solutions that leverage technology to turn the error-prone and time-intensive task of payment acceptance into an efficient, accurate and cost savings process for law firms. Click here for more information.

 
 
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