One obstacle you will definitely come across while running a small business is receiving invoice payments in a timely manner. A lot of companies pay anywhere from 30 to 90 days out. These kinds of payment terms can put a small business owner out of business if they are not good at managing their money. I typically recommend asking your customers if they can pay you less than 30 days. Do not be too proud here. Tell your customer that you can’t afford to carry receivables for long periods of time. One way I recommend getting paid as fast as possible is by accepting credit card payments. In the past it was hassle to accept credit card payments because the credit card processing companies always try to sign you up with long term contracts that allow them to charge you all kinds of dubious fees. WIth the advent of smartphones and competitive payment processing centers the small business owner has all kinds of options that they didn’t have a few years ago. I want to talk about two ways of accepting credit card payments.
First is a company called SquareUp which allows you to quickly accept credit cards from your iPhone, iPad, iPod Touch and Android phone. Sorry you’re out of luck Blackberry users. They charge 2.75% per credit card swipe regardless of the amount. Swipe the credit card and the money is deposited into your bank account the next day. That is it! If for some reason you cannot swipe the card and have to enter the credit card number in manually you will be charged 3.5% + $0.15. I really like this service because it is easy to setup and use. Plus there are no hidden or backend gotcha fees. To get started is easy just go to Squareup.com create an account and they will mail you a credit card reader. For quick mobile credit card processing this is the only way to go.
Paypal Invoicing is the other product I like. Paypal does not have a smartphone app for Online Invoicing. The reason I like this is because it is extremely simple to use. Just login with your Paypal account, create an invoice, customer receives the invoice via email, customer pays and you get the money deposited into your Paypal account. There are no monthly or setup fees. You are charged the following for each transaction:
- $0 to $3,000 2.9% + $0.30
- $3,000+ to $10,000 2.5% + $0.30
- $10,000+ 2.2% + $0.30
This is perfect for the small business that has a small amount of monthly invoices. To get started go to Paypal Online Invoice.
While I am against using credit cards to purchase products I am not against accepting credit card payments. The reason is simple. I am in the business to make a living and provide for my family. There will always be businesses that use credit cards for purchasing equipment and services. I find that some customers prefer paying with credit cards because they receive all types of rewards. Another aspect I like about accepting credit card payments is for new customers that do not have any payment history with my company. If you are unsure about payment terms with a new customer ask them if they are willing to pay via a credit card until they establish some transaction history with your company. Does your small business accept credit card payments? If so do you know of a better method than the two I mentioned? Please leave your response in the comment box below.
Thank you for taking the time to read this article.