In the ever-evolving hospitality industry, payment optimization plays a vital role in managing vendor relationships, increasing revenue, and creating efficiencies in operations. Here’s a look at some key trends to take you in 2025, focusing on governance, efficiency, and best practices in the sector.
Payment Optimization in Action
Money talks. Financial efficiency is crucial at every business level, however, many executives don’t fully understand the intricacies of payment optimization. This creates an opportunity for those in operational roles to highlight the impact of streamlined payment solutions. For instance, bringing in $1.5 million in a year speaks for itself, regardless of the path taken to achieve it. Efficiency and results are what matter most to executives and stakeholders.
Success in payment optimization isn’t about having a large number of vendors; it’s about having the right vendors, BirchStreet emphasizes. At Ambridge, for example, they achieved remarkable results with only 3,000 vendors, bringing in $3.5 million. This approach highlights the strategic value of selecting and retaining key vendors rather than expanding the vendor base indiscriminately.
Vendor Management and Centralized Governance
Effective vendor management requires both a streamlined approach and robust governance. It’s a challenge to maintain a lean vendor list, What measures can you put in place to prevent “vendor master cleanup” from spiraling back to 27,000 entries? Governance is a recurring theme, “It’s about getting the right people on the bus and ensuring they’re in the right seats.”
BirchStreet suggests centralizing vendor enrollment processes and establishing clear policies on adding or changing vendors. For example, Highgate created specific guidelines to manage changes in banking information to mitigate fraud risk. Additionally, they worked with Apex Analytics, which provided a comprehensive cleanup of the vendor master file, resulting in the addition of over 70,000 updated fields. Although costly, with the entire project reaching $300,000, this investment laid the groundwork for a more efficient system.
Cost-Benefit Analysis of Vendor Management Solutions
The hospitality sector frequently deals with fragmented vendor relationships, spanning everything from donut shops to florists, each adding complexity to payment processing. Highgate previously added up to 1,000 vendors monthly due to its decentralized system. This high turnover prompted them to implement a central vendor management approach, ultimately yielding a “night and day difference.”
While vendor management and data cleaning projects can be costly, as shown in the Apex Analytics example, they ultimately enable businesses to move forward with a more accurate and controlled vendor database. The ability to streamline addresses, avoid duplicate entries, and ensure clean, up-to-date vendor records leads to operational efficiency and cost savings over time.
Moving Forward: The Role of Governance in Sustaining Change
Establishing governance protocols is only the first step in vendor management. Sustaining these changes requires ongoing monitoring and a centralized system that ensures all employees understand and follow the established guidelines. This ensures that essential updates, such as a vendor address change, are seamlessly integrated into the system and accessible to everyone who needs them as this approach was transformative for Highgate’s operations.
Final Thoughts: Building a Stronger Hospitality Sector Through Payment Solutions
Effective payment optimization and vendor management in hospitality aren’t just about reducing costs—they are about creating scalable, efficient systems that enhance vendor relationships and foster a more resilient business. By focusing on selecting key vendors, centralizing governance, and investing in essential data-cleaning initiatives, hospitality businesses can streamline their operations and ultimately enhance their bottom line.
Interested in learning more about BirchStreet Pay, speak with an expert.