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Three actions a growing company can take to increase profitability

by Sarah Craig September 17, 2024

When businesses are considering ways to grow their business and increase profitability – they likely look to marketing, sales, or product development to see how they can attract and retain customers. While those are all solid considerations, there are a few less obvious ways a company can attract new customers, retain users, and ultimately increase profits. We’ve leveraged insights from our parent company, Stripe, to identify three actions a company can take to increase profitability that might not be top of mind, but should be. 

1. Fraud prevention

According to a survey conducted by Stripe, 64% of global business leaders say that it’s become harder to fight fraud due to an increase in fraud type and volume. In addition, survey findings showed that fraud impacts go beyond financial repercussions, with many businesses forced to reallocate resources from growing and improving products to preventing fraud.

However, there are steps businesses can take to lessen the impact of fraud on their bottom line. Taking advantage of machine learning fraud tools like Stripe Radar can block illegitimate transactions before they take place based on identified risk factors. Radar’s algorithms are constantly updating, so even as fraud types change, your business remains protected. Investing in a fraud prevention tool is a good step to securing higher profitability in the long run. Learn more about Stripe Radar here. 

2. Sales tax compliance

Sales tax management is often considered a back office role. However, non-compliance can quickly disrupt profitability gains for a company. This is especially true as a company is focused on growth. Due to economic nexus laws in the US, when your business grows, so do your sales tax obligations. Without a way to manage your compliance, you could face penalties and interest that come with non-compliance. 

To avoid cutting into your profitability, setting up a process to monitor economic nexus exposure, calculate, collect, and remit sales tax is important. For many businesses, this means turning to a sales tax solution like TaxJar, that can manage every aspect of compliance, from nexus threshold monitoring to registrations to filing and remittance. While implementing a sales tax solution can take time and money up front, it will end up saving time, money, and lower your risk of audit in the long run. 

3. Mobile point-of-sale payments (POS)

Like most consumers, you’ve probably purchased an item using mobile in the past year. In fact, most consumers likely have – since the mobile POS payments market is growing fast, and is expected to reach $6.11 trillion by 2028. With projected revenue numbers like that, enabling mobile payments to unlock profitability is a no brainer. Mobile payments allows companies to reach new customers and provide an improved customer experience. Additionally, mobile payments have a lower transaction cost compared to traditional payment methods such as credit cards.

Not all payment processors provide seamless mobile payment options like Stripe Payments. Stripe provides multiple options for integrating mobile payments, depending on what your business needs. See how your business can increase profitability by enabling mobile payments here. 

A growth mindset means thinking outside the box

While the three actions we’ve outlined might not be as flashy as a brand campaign or unveiling a new product line, they can have just as much impact on overall profitability. Preventing fraud (and the cost associated), establishing and maintaining sales tax compliance, and unlocking new payment methods for customers can open the door to new revenue opportunities. Whether that means reallocating your fraud resources to growing a new product, or avoiding costly penalties that come with non-compliance, your bottom line will thank you. 

Ready to automate sales tax? Sign up for a free trial of TaxJar today.

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