As a small business owner, getting paid is what keeps your business going. You could do amazing work and land tons of projects, but if you don’t bill for your work and request payment, you won’t be in business very long.
With advances in technology, it’s much easier and convenient to process payments online, especially for small businesses. The time and money saved by managing your payments online frees you up to focus on what really matters: Growing your business. On top of that, providing more payment options for your clients makes it easier for them to pay, which will help keep your cash flowing.
Here are some of the benefits to accepting online payments, as well as a few of the best payment providers on the market.
Benefits of Getting Paid Online
Obviously, the main benefit of an online payment system is that you can get paid very quickly, which helps manage your accounts receivable. You could get paid within minutes of sending out an electronic invoice, instead of waiting days or even weeks for a check to come through snail mail.
As mentioned earlier, you also make it easier for your clients to pay your invoice by offering multiple online payment options. Most vendors and clients are familiar with PayPal, but some prefer to use a credit-card processing service or a direct bank transfer. So give your clients the option of which payment service they want to use.
Through online payments, you can also speed up processing times by adjusting the billing cycle. The traditional billing cycle is 30 days, but you can incentivize your clients with small discounts if they pay within five, 10 or 14 days. Plus, this means steady cash flow for your business.
When billing clients with an invoice, you’re able to keep clean records and follow up with any invoices that are past due. You can easily match receipts and time worked for certain projects, and you can be sure that you’re billing for the proper amount and keeping track of clients with past-due invoices.
Popular Payment Systems
When searching for the best payment-processing system, you may have to test out a few services to see which one works best for you. Transaction fees are important, but so is ease of use, professional-looking design and the payment preferences of your clients. Here are a few great options for accepting online payments:
- PayPal: PayPal is one of the most popular and well-known methods of getting paid online. Setting up a PayPal account is easy and free, but you do have to pay a fee for each transaction, which is 2.9% of the amount you receive plus $0.30.
- WePay: Although they offer the same transaction fee as PayPal, WePay allows users to customize their invoice with branding colors and logos. Looking professional is a big part of being professional, so this small perk can make a big difference in how clients view your business.
- Stripe: Stripe is a new but rapidly growing startup that allows you to process payments via credit cards or direct deposit. It takes care of all your payment needs—from storing cards to handling subscriptions—all without using a merchant account. Like WePay and PayPal, Stripe charges 2.9% plus $0.30 per transaction, based on volume.
- QuickBooks Payments: We may be a little bias, but QuickBooks Payments is a great option for small businesses on the go and for those already familiar with the QuickBooks lineup. One major benefit of going with QuickBooks is that ACH Bank Transfers are 100% free, unlike other payment processing companies. Aside from being able to accept online payments, you can also process payments in-person using GoPayment. Their payment network makes it quick and convenient. If you have employees, their payroll service can also process paychecks, calculate payroll taxes and file payroll tax forms.
Remember: Payment Fees Are Tax-Deductible
Don’t forget that any fees you incur while processing payments from clients are tax-deductible. This is an ordinary cost of doing business, so be sure to record all the fees you pay throughout the year. This could add up to a significant amount when tax season rolls around.
Don’t Forget to Be Polite
The success of any small business relies on building relationships and the reputation it has with clients. Keep this intact by always being polite and including a quick “thank you” at the bottom of your invoices and payments.
A study actually found that a simple “please” or “thank you” increased the chance of getting invoices paid by more than 5%. This could easily equate to thousands of dollars per year, depending on the kind of work you do.
Of course, it makes it easier to get paid when you know how to create and send professional invoices, so check out our Complete Guide to Invoicing to make sure your invoices send the right message to your clients and get paid in full and on time.