VCCs, tech secret to fast collection

With inflation hitting 8% in some regions, value of money falls by time you receive payment. Slow collection literally affects bottom line. One can pressurize partners to pay quicker, but secret to fast collection lays with a mixture of automated processes and use of VCCs.

Delays of 60 days in collecting money—and we frequently see travel businesses waiting 60 days, and more—in a high inflation environment of up to 8 per cent in some markets means that money has lost almost 1.5 per cent of its value by the time it hits your account.

A 1.5 per cent per transaction increase from you bank would make you angry, and rightly so. And yet 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. How do we solve this problem? Getting paid more quickly: slow collection literally affects the bottom line.

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.

There is simply no justification for this in today’s world. 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 (VCC) payments. This combination has the benefit of being more cost-effective and time efficient too, for example doing away with painful reconciliations.

Unfortunately, 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-19 resulted in high levels of cancellations that caused chaos with such old fashioned payments systems—and more generally, an unoptimized payments system means you needlessly must have extra money laying around in your business to fund the gaps between paying out and collecting.

Anyone now just waking up and smelling the coffee we recommend that you take this as a wakeup call for your business. In this current climate of COVID-19 volatility and geopolitical uncertainty, who knows will happen next? Start getting paid promptly and free up your time and money to focus on what you do best: running a travel business.”

For quicker payments

• Have complete visibility of all transactions: reconciliations shouldn’t be time consuming.
• Speed up your processes: no more twice weekly payment schedules, those days are gone.
• 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.
• In short: automate all financial payments processes or you´ll forever be at the mercy of volatility.