What is an Integrated Payment System?

This article is only for educational purposes and does not constitute legal or financial advice. Make sure you consult a professional regarding your unique business needs.

Integrated payment solutions can streamline small businesses’ finances, saving you time and money. Learn more about how they work and their benefits.

What is an integrated payment system?

Integrated payment systems allow business owners to link their payment processes to other critical financial functions. These can include:

  • Inventory management
  • Sales analytics
  • Customer relationship management (CRM)

Rather than each payment and accounting process working in isolation, integrated payment solutions bring them together. It makes everything more streamlined and reduces the risk of human error.

Investing in these systems is all about speeding up the efficiency of your business. They dramatically reduce the time spent on manual data entry and the need for lots of complicated paperwork. This frees you up to get on with running and growing your company.

Every time a customer confirms an order using your integrated Point of Sale (POS), their transaction information can be automatically shared with and logged in your accounting and inventory management records. It saves you and your staff the hassle of re-entering the same information in each individual system – and tackles the threat of typos.

How does an integrated payment system work?

Consolidation is at the heart of how integrated payment systems work. Instead of recording data using multiple pieces of software from different providers, business owners can bring their critical payment, accounting and sales functions together in a single system. All these functions then connect, so data can be shared between them seamlessly.

For example, imagine you own a shoe shop. Whether you sell to customers in-store, online or both, with each transaction an integrated payment solution could automatically update your records and accounts to reflect that sale – as well as your stock levels. It could also update your CRM system in real time, to help you keep track of customer trends.

What is an integrated POS?

Integrated POS hardware and software go far beyond the limited capabilities of traditional card readers and tills.

Rather than payments being a separate function, an integrated POS can automatically connect transactions with the accounting, CRM and inventory processes of your business. This helps to speed up cash flow by reducing paperwork and the need to manually enter data into different systems.

Integrated POS devices such as the Square Register give business owners the chance to manage their card and contactless payments, online sales, and deliveries all in one place. Transaction information feeds into the Point of Sale software, which then automatically updates your records and inventory.

What are the benefits of integrated payment solutions?

Integrated payment solutions can offer significant benefits to businesses of all sizes. They include:

Saving time
Collecting and making sense of transaction data can be a huge burden on business owners, especially those running small companies where time is at a premium. The long hours spent manually entering credit card data into your accounting systems, matching payments to customer invoices and updating stock levels can quickly add up.

Integrated payment systems take the strain out of managing your books by automatically linking up the core financial systems that keep your business moving. No longer do you need to painstakingly enter the same data sets into multiple systems. Now, you can see how each sale affects your accounts and inventory in real time, all in one place. That means spending less time on admin and more hours building your business and brand.

Increasing accuracy
Manual payment and accounting processes take up valuable time and increase the risks of errors and inaccurate data. Incorrectly calculating sales or mistyping numbers when entering transaction data into your books could mean accounts fail to add up – a real headache for small business owners.

Integrated payment systems automatically do the maths for you when it comes to transactions and update your records accordingly. Your integrated POS will share any payment data with your other core accounting and record-keeping systems, ending the need to manually input it into different tools.

By updating your accounts in real time and setting out all your data in a standard format, the tax process can also become more streamlined.

Boosting security
Consolidating your accounting software into a single system can enhance the security of your business. It cuts the number of access points for fraudsters trying to steal financial or customer data and means fewer logins for you to remember.

Integrated payment solutions also store your data using cloud-based software, which runs on secure off-site servers. You can access your accounting data from any device with an internet connection and as it’s not held in a single physical location, your all-important data is automatically protected from business disrupting events such as an office floor or fire.

Finally, integrated payment systems include cyber security measures like EMV, tokenisation and end-to-end encryption to keep all transaction data out of the hands of hackers – helping businesses retain the trust of their customers.

Speeding up cash flow
Business owners can increase their cash flow by automating payment and accounting processes through integrated systems. Linking up an integrated POS device with your bookkeeping tools can allow payments to be posted automatically in your ledger and accounts.

By removing the need for manual data entry, you can also speed up the invoicing process – reducing the time it takes to compile bills for customers and avoiding delays in sending them out. This can then reduce lead time on receiving payments too.

Your inventory will also update automatically, helping you plan if stock urgently needs topping up in a particular area.

Things to consider in an integrated payment system

When browsing the range of integrated payment solutions, it is important to consider the level of service your business needs. A basic package including integrated POS hardware and software is a good place to start. As your business expands, you can add on more specialist features tailored to the unique demands of your industry. For example at Square we offer integrated POS systems designed specifically with appointments and restaurants in mind.

Pricing is a key factor to consider, whatever the stage of your business – but it’s not the only one. Strong customer service, easy access to IT support and user-friendly functionality will all be vital once you get up and running with your integrated payment system.