It’s not a secret that the domestic manufacturing industry is in turmoil, due to the economy and ever-present impact from overseas. Most, if not all, are adjusting their business plans and strategies. The name of the game is profitably. And profitability more than ever depends on efficient production, distribution and payments.

Interesting fact: U.S. manufacturers spend more than $7 billion annually for computer equipment, according to multiple sources. The trade off is that spending on those systems can account for increased productivity in the labor force – a 50 percent improvement in the last 10 years. That’s a good thing.

Another area where manufactures have historically invested and seen return is in enterprise resource planning (ERP) technology and back office technology. It’s proven that ERP has streamlined business processes and reduced the number of labor hours required per unit of production. In addition, most manufacturers have automated their back office processes including accounting, order entry, inventory management and human resources. To further lower operating costs, smart manufacturers have increasingly outsourced some services to third-party providers.

So what is left? Where else can savings be found? Manufactures really need to take a look at accepting electronic payments. Manufacturing, at first look, may not seem to be suited for credit card payments. But maybe the industry could learn lessons from other segments of the buying chain.

The average cost to process credit cards is three percent, and 72 percent of Fortune 500 companies pay with “p-cards.” Research shows that companies will spend more with a credit card than they do if they have to use cash. Accepting electronic payments could result in a new revenue stream.

Traditionally, manufacturing companies provide financing to customers by carrying large receivables. But in today’s economic times, revenue and profit management is a mission-critical business process for companies. Money that is not tied up in AR is money that can grow the business. Payments have become more complex. Offshore manufacturing and out-of-territory sales are commonplace. But what is the best, most efficient way to manage these payments and grow revenue?

Manufacturers have a real opportunity today to sell direct through Web stores, ultimately speeding delivery and cutting out a layer of distributors. To take advantage of this opportunity, manufacturers should take a stronger look at e-payment acceptance solutions. Electronic payments could allow the company to:

1. Improve profits by ultimately increasing the size of the purchase
2. Reduce the risk of extending credit to customers by getting paid immediately and ensure it gets paid on time every time
3. Accelerate time to cash — speed of payment
4. Have the cash on hand to reinvest and fund day-to-day business activities, generate more sales or further grow business
5. Provide better customer service
6. Increase liquidity and sales
7. Reduce administrative costs

While that all might make sense on paper, it’s important to explain that if manufacturers are going to accept electronic payments, they need to integrate that solution into existing systems, optimizing their investment in ERP systems. And to do so, they need to vet and choose the right partner, one who can help streamline their receivables management process with very little up front time and cost.

1. No need to worry about updates or upgrades (the credit card associations make at least two updates per year that would be automatic)
2. No costly maintenance, it’s all taken care of offsite
3. No capital expenditures for licenses, hardware and servers, just a small monthly fee to
4. process transactions Lower TCO of payment acceptance
5. Quick upstart, less time to deploy the solution vs. doing it in-house
6. Reduce downtime costs – if something goes wrong the vendor is “on it” immediately to fix the issue
7. Reduce support costs
8. The solution is scalable, particularly when opening new sources of revenue through call centers, web stores or new geographies
9. The solution affords companies the opportunity to offer customers top-level card security by removing cardholder data from their systems entirely, utilizing tokenization technology

Which bring us to tokenization, the latest in electronic payment security. Security of a customer’s payment information is key – and a SaaS model can raise those questions into concerns. But with tokenization, the security concern is virtually eliminated.

Tokenization is a technology that leapfrogs the better-known, traditional encryption. Sensitive data is removed from enterprise systems and, as an added bonus, the technology is complimentary to any enterprise system. And the technology affords companies the opportunity to eliminate the storage of sensitive information. This cutting-edge technology works by intercepting cardholder data entered into an enterprise payment acceptance system like a Web store, CRM, ERP or POS, and replacing it with a surrogate number known as a “token,” a unique ID created to replace the actual data associated with a specific card number.

Companies have the opportunity to increase profits and sales, while radically improving data security. Some software takes tokenization to the next level by ensuring that sensitive cardholder data never enters the enterprise payment acceptance system. Sensitive information is intercepted and tokenized at the time of sale. The secure token then routes back to the merchant for authorization and settlement. And the process is entirely transparent to the customer.

Manufacturers have a real opportunity to increase growth and profitability and optimizing their ERP investment by implementing integrated electronic payment acceptance solutions.