As a business, you want to get paid for work completed, and as soon as possible. Unfortunately, it is not always as simple as that. When setting up your business, you want to give careful consideration to what payment methods you will accept and how you will be able to accept them. This guide will go over the different options you have for setting up your business to receive payments, whether your business is brand new or you run an established business and are interested in implementing new payment methods.
Open A Separate Bank Account
No matter the size of your business, the first step to receiving payments is to open a separate business bank account into which to deposit all revenue. You must also use it to pay all business expenses. This is critically important. It will allow business funds to remain entirely separate from personal funds and make both expenditures and revenue easier to track. It will also reduce headaches if you are audited after tax season, because your accounting will be easier to prove.
Decide On Your Payment Options
Most businesses will want to accept cash and credit cards. However, there are other options to consider as well, including personal checks and third-party payment programs such as PayPal or Google Wallet. All payment options have pros and cons. It is important to do proper research into things like fees, provided tech support and popularity among consumers to see whether accepting a payment option is worth it. If you offer a product or service that is particularly expensive, you may also have to consider whether to offer payment plans.
Embrace Mobile Payments
More and more customers and businesses are turning to mobile payments as a convenient and centralized way to pay for goods and services. Because of this, your business should strongly consider accepting these forms of payment. The two most popular and widely-used are Google Wallet and Apple Pay, although PayPal’s option is catching up. To accept them, you will need a contactless point-of-sale terminal that is payment–capable.
Send Invoices Electronically In A Timely Manner
Electronic invoicing is one of the most efficient ways of sending your customers invoices and getting paid quickly. This ability is usually built into the accounting software you use, of which there are many solid options. The most popular is easily QuickBooks, although Xero, Freshbooks and Wave are widely-used as well. These programs also give you the option of automatically sending reminder notices to reduce occurrences of clients simply forgetting about an invoice they need to pay. Having these features integrated into your accounting software is helpful for keeping a close eye on the finances of your business, as your accounts will be kept updated with both incoming income and outgoing expenses. It will also make tax calculations considerably easier, because that information is saved and can be automatically generated.
Use Recurring Billing
This is most useful if you offer some kind of subscription service, such as telecommunications or a membership. Recurring billing can also be used for clients who are regulars and get the same things done or ordered every month. This can be a very convenient option for customers who will be using your service or ordering your products on a regular basis. You can set up the ability to take recurring payments through your credit card processing system, such as PayPal, BluePay or any number of others.
Get A Smartphone or Tablet Card Reader
This is another piece of technology that has gained in popularity tremendously over the last few years. They allow you to accept mobile payments and credit card payments on your smartphone or tablet. There are a number of different smartphone card readers although many of them offer the same basic features. They work best for vendors or small businesses.
Setting up your business to receive payments is not difficult, although it does take some careful consideration. Some payment methods may not suit your business well, or you may choose not to take the risk on certain payment options such as personal checks. As with all major business decisions, consider what will be optimal for your particular business model and most convenient for your customers. When you come up with a good payment system, your business will be set up to grow.