What You Need To Know About Taking Payments In Your Business
When you are trading in a business, you need to at some point be able to start taking payments, and the way in which you approach this can prove very important indeed. As long as you have the right approach to this, you are going to find that you are much more likely to have a strong business and be able to run it effectively, so it’s certainly something that is worth thinking about.
In this post, we’ll look at some of the things that you will likely need to know, and benefit from knowing, about taking payments for your business. As long as you have thought about the following, you should find that you are going to have a much better chance of being able to run the business effectively from the start.
Understand Your Payment Options
One of the main things you’ll need to appreciate is that you actually have a huge number of different payment options to consider, and knowing what they are and how they differ, as well as how they function, can be hugely important here. There are several ways that businesses can accept payments, and the best method will depend on how and where you operate.
You might decide to take cash. Fewer and fewer companies are taking cash right now, but it is nonetheless a fairly solid option for anyone who wants to deal easily with in-person transactions. It is also a low-tech and immediate way of processing money, and there are no card fees or anything like that which you’ll have to think about. On the downside, not having a paper trail can be tough, and it is not so secure for larger volumes.
Alternatively, or additionally, you might decide to take credit and debit cards. These have the benefit of being widely used, and your customers will more or less expect that you take these cards. It will require that you have a merchant account or a payment processor, and you’ll have to bear in mind some of the intricacies of that. For instance, some types of business, like CBD for example, sometimes find it hard to find a merchant provider who is happy to work with them, so you might need to use a CBD merchant account specifically. However, those kinds of hiccups are easily overcome. Processing fees exist for cards but are typically quite low.
You might decide to take bank transfers too, which can be particularly useful for larger B2B transactions or any kind of recurring payments that you might need to take. It also has much lower fees than card payments, but slower processing times – somewhere in the region of one to three days. Nonetheless, for some situations this is the perfect payment method, so it’s certainly one to be aware of at least.
Mobile payments are another really useful and forward-thinking way to take payments, and you can allow customers to use a range of apps from Apple Pay to Google Pay and Venmo and more. It is fast, increasingly popular, and requires a compatible POS system, but that is now affordable and easy to get. You might find that you also want to take online payments through a gateway, which is essential for an e-commerce business and useful for many others too.
Be Aware Of Fees
Whatever kind of payment system you use, more or less, there are going to be costs associated, and as a business owner you’ll always need to be aware of what those costs are going to be, and how you are going to ensure you can deal with them and keep them to a minimum. Cash has no fees, of course, but every other method is going to have some kind of fee you need to be aware of.
Usually, you will be having to deal with transaction fees, which are a percentage of each sale, and which you will either have to bear the brunt of yourself or pass on to the customer, which raises prices and affects your brand image positivity. Then there are monthly service fees for some platforms, usually resulting in a service that is easier to use, but still is something you will want to think about. You might also have chargeback fees, which happen when a customer disputes a charge, although these are quite rare. And of course, there can be setup fees occasionally, especially for some of the larger POS systems out there.
It’s important that you read the fine print, and you know what kinds of fees you are going to be expected to pay, so that you can compare providers before locking in.
Security & Compliance
It’s hugely important to have a robust attitude towards security and compliance, for the simple fact that it helps you to keep your customer and your business as safe as possible. There is something called PCI compliance which you have to follow if you accept card payments, and you will be audited on whether you are doing so at regular intervals. You may also want to use encrypted payment systems online so that you can help to keep customer information safe, and avoid storing customer credit card information directly unless you can do so very securely.
As long as you are keeping on top of the security and compliance of your payments, you’ll find that you are able to have a much better approach to your payments in general. Your business will benefit, and so will your customers.
Invoicing
Sometimes you might have a need for invoicing, but not always. Where it is a necessity, however, you should make sure that you are keeping those records clearly and accurately, and that you are doing all you can to look after them well. This will help you when it comes to auditing, and you’ll find that you have a much better sense of what you are able to look after.
Those are just some of the things to know about taking payments in business.