One of the most important parts of running your own business – if not the most important part – is how you bill customers and get paid for the goods and services you provide. With so many options at hand, understanding what’s available and offering the right payment methods for your business, and your customers, could help boost your revenue.
What are your payment options?
There are many payment options available. They include:
- Credit or debit card
- Direct debit
- Money order
- EFTPOS (electronic funds transfer at point of sale)
- Gift cards and vouchers
- Bitcoin and other digital currencies (cryptocurrencies)
- Online, such as PayPal, Square, and Stripe
How to choose the right payment method for your business
Because every business is different, there is no one-size-fits-all payment method. The best option for you will depend on the type of business you run. As a small business owner, you’ll need to consider the advantages and disadvantages of each method, and how this affects both your customers and your operations.
There are many questions you should ask yourself before deciding on a method for your business. For example:
- How do your existing customers, or the customers of businesses in a similar industry, prefer to pay for goods or services?
- Does your business rely on quick access to funds to stay operational?
- What are the costs involved – service fees, transaction charges, and so on – for the payment methods you’re considering?
- Do you expect there to be a delay between purchasing and selling your inventory and receiving payment?
- Will you have to follow up with customers for payment?
- Will your customers prefer a more private payment method – for example, would they prefer to pay in cash, rather than a credit card which will automatically record the transaction?
- Does it put you at risk of theft, for example cash held on premises?
- Does it rely on electricity or a phone network, and do you have a backup available if these systems go down?
If you’re a small business owner operating a busy cafe, giving your customers the option to pay both in cash, or with contactless credit or debit, is convenient for them and is processed quickly, so you’re paid promptly. If your business only sells products online, then credit or debit and online payments – such as PayPal, Square, and Stripe – will be more appropriate. You can even integrate PayPal with some accounting software programs, like QuickBooks Online, so your customers can make online payments direct from your QuickBooks invoices.
When deciding on the right payment method, or methods, for your small business, first consider convenience for your customers, and then how it affects your cash flow, and ability to be paid on time.
To learn more about running a small business, check out these resources.