Once upon a time, it used to be that deciding how your small business handled payments was quite simple. While the digital revolution has offered customers more payment options, it has also made the process substantially more difficult for merchants, particularly small businesses and online retailers.
Moreover, the optimal payment option for a small business will be determined by a number of variables. Consider the magnitude of your transactions, who will be managing the money, and your accounting system before deciding on the appropriate way.
It pays to keep things simple when it comes to small company payment choices. Make it as simple as possible for customers to pay. Make payment management simple for your team. Make it simple to locate all of your financial data, anytime and wherever you need it. Follow the guidelines given in this article to improve your small business’s payment process.
Create a Payment Policy
Make sure you have established credit and collection policies in place before you offer credit terms to any customers.
It should include defining how much credit you can afford to extend without negatively impacting your cash flow, evaluating which customers will be eligible for credit and how much credit they will receive, establishing terms of payment, and specifying your collections process for past-due accounts.
Merchant services companies function as a link between your customers’ electronic payments and your cash register. They let you take debit and credit cards while also ensuring payment security for both your clients and yourself. Each type of merchant services has its own set of features, but they all seem to belong to one of three categories. Merchant Account Providers (MAP), Payment Gateway Providers (PGP), and Payment Services Providers (PSP) are the most common providers.
The most prevalent merchant services supplier is account providers. Providers of merchant accounts must, at the very least, set up a merchant account for you and provide services for credit card processing.
Payment gateways are critical for online retailers. To use a payment gateway, you’ll need a merchant account.
Payment gateways are a type of online service that enables credit and debit card transactions to be completed over the internet.
For most businesses, a merchant account is both a good idea and a must for taking credit card payments. However, there are other alternatives, such as PSPs, that may be advantageous to small business owners.
PSPs provide merchant processing services to businesses that only process a few thousand debit/credit card transactions each month.
What you require is determined by the type of business you operate. A merchant account or payment service account is required for any business, although certain services will be useless to you. For instance, you won’t require a payment gateway if you don’t have an online store.
Make Use of Mobile Sales
Many small businesses have embarked on the mobile craze, and with good cause. Even though more individuals are spending more time at home, they still want to make use of some services.
Mobile payment alternatives for small businesses are critical for any kind of small business. Swipe your clients’ debit or credit cards with a mobile card reader to receive payment promptly.
In addition to securely storing critical client information, the finest mobile point-of-sale system will make subsequent payments a snap. This information may also be used to generate automated receipts for your clients’ records!
Email billing is one of the most effective small company payment methods if you have a service-based small business.
Customers that get click-to-pay invoices may quickly see how much they owe and submit their payment information. In a matter of seconds, they will receive an instant receipt.
All of your financial records and data will be simply maintained in one area when you have a completely integrated payment system. After an appointment, no more struggling with paper invoices or trying to track down checks!
For a new small business owner, increasing top-line revenue is exciting, but controlling credit can be complicated, tedious, and time-consuming.
It’s tough to refuse a sale, but neglecting to follow appropriate credit management processes might cost you money in the long term when you have to track down unpaid bills. Finally, the payment methods you take at your business will be determined by your business strategy and the kind of consumers you have.
Your small business’s optimal payment alternatives should be both cost-effective and suitable to your accounting system. Providing consumers with a range of payment methods will help you increase your cash flow.
You must create and implement strong credit management procedures from the start if you want to boost your chances of being paid on time and on the whole. Remember, a transaction isn’t complete until you’ve received payment!