Whether you're selling your perfected jalapeno salsa online, at your local storefront, or even at a yearly jalapeno festival, payment processing is one of the most important parts of running your business. This guide will look at the ways payment solutions can make this process as easy and efficient as possible.
Easy to Set Up
One of the biggest challenges faced by small business owners is keeping track of all their payments. From the cash you collect at your storefront to the checks you deposit in your bank account, payments are an integral part of running a business, and they can sometimes get lost amongst all the other to-do items on your list.
That’s why it is essential to have the right payment solutions in place to make it easier for your customers and team members to pay you. Whether you sell online, offline, or both, the right tools can help you accomplish this important task with ease.
The best way to do this is to utilize a credit card processing solution, such as Square or PayPal. These services offer a one-and-done checkout that allows your customers to pay you with their preferred method of payment. This will save you time and effort, and will also improve customer satisfaction as they don’t have to wait around to give you cash or a check.
Another way to make it easy for your clients is to enable recurring payments. This option, which is available through a service like GoCardless, can reduce your client’s manual payment admin and ensure you receive payments on time. It is a great option for businesses that see frequent repeat customers, such as daycares, gyms, and dance studios.
To implement recurring payments, you’ll need to set up a merchant account with the right merchant services provider. Depending on your business, this may be as simple as providing a reputable third-party processor with your bank details. This will allow them to transfer funds from your customers’ bank accounts to your business account, without the need for you to manage the transaction.
The payment gateway will take care of the rest, and your funds will be deposited in your account that same day. Using this type of system can make your business more competitive, as it is quick and easy for your customers to use and helps you stay on top of your payments. It is worth comparing the different options available to you, to make sure that you find one that fits your business needs and requirements.
Easy to Reconcile
The payment reconciliation process reveals discrepancies between records in a company’s books and cash in its bank account. It’s important because mistakes in record keeping can make a business think it has more money than it does or less, which affects regulatory compliance and the ability to invest funds wisely. It also helps a business know how well its financial processes are functioning and if it is at risk of being defrauded by vendors or customers.
The first step in the payment reconciliation process is gathering internal transaction data and external statements from banks, credit and debit cards, mobile payments services, and other sources. This step involves extracting the specific information from each recorded transaction and comparing it to dollar amounts on bank statement reports. Transactions that match are eliminated from further review, while those that don’t are investigated to determine what needs to be corrected. After correcting any mismatched transactions, a final bank balance and general ledger (G/L) balance are reconciled for the reconciliation period.
Reconciling accounts can be tedious and error-prone, but it’s essential for a company’s health. Without a robust reconciliation process, a company might spend more than it has and miss opportunities to grow its business. In addition, the absence of a reconciliation process can create accounting anomalies that are difficult to discover.
One example of a common anomaly occurs when checks are cashed but not recorded in the company’s book until they show up on a bank statement. Another is when a deposit made in the bank isn’t recorded in the accounting system until it clears, which often takes several days after being taken to the bank.
For these reasons, experts recommend companies perform a reconciliation at least once a month or every time a bank statement is received. In addition, reconciliations should be performed at the end of each department’s reporting periods, so that any discrepancies can be addressed quickly before they become more difficult to resolve. In addition, companies should maintain open lines of communication with their bank and other parties involved in their payments to resolve any issues and obtain needed information or clarifications.
Easy to Track
Getting paid on time can be a full-time job for small business owners. Chasing down payments, tracking cash and check payments, and managing receipts can take up valuable working hours that could be better spent on other business activities.
Small businesses that accept digital payments can get paid almost immediately, reducing the need for costly loans and improving cash flow. Additionally, the ability to track payments allows business owners to see trends and patterns in purchases that may help them develop more efficient marketing strategies or new products for regular customers.
Some online payment tools allow businesses to make payments that can be verified as authentic by the recipient, providing an extra layer of security for both the sender and the receiver. This is especially useful during a pandemic, when it can provide greater peace of mind to both parties that their funds are secure. Some faster payments also require no interaction at all, allowing money to be sent without knowing the recipient's account information.