Payment Processing: Let's Get Paid (The right way)
When it comes to the financial side of your business you want to treat your business like a business from the beginning. There are some financial tools that you must have in place. You want to get paid right? One of the things that you definitely need to have in place is a way to take payments.
With technology constantly progressing there are so many money apps that allow you to exchange funds with each other. But, you have to be careful because many of these apps are to be used for peer to peer use. In other words, they are meant to be used among friends and family. Apps like zelle, quickpay and cash app are better utilized for exchanging money between family and friends. Now, cash app does have a business account feature but cash app still isn’t a good option and I'll get into that some more later.
What you need to have in place is a business payment processor. These are designed to take online payments for your business, allow you to see your transaction history and keep track of your payments.
They all pretty much function the same and can get the job done but they all have different features that may be more appealing based on your business needs. Some things to consider are how quickly are your funds available after a sale is processed, what are the transaction fees, which processors are easily integrated into your website and how easy the checkout process will be for your customers.
The most common processors are Stripe, Square and Paypal. I personally prefer Square as my first option, then Paypal as my second. I do utilize Stripe as well because it is the processor that is automatically integrated into my website provider. There are some websites that only allow certain processors to be integrated so that may be something that you run into.
With Square and Paypal, you can create custom invoices and templates and you are able to access your funds very quickly. Square allows your payments to be automatically deposited into your account the next business day (sometimes the same day) and PayPal allows you to access your funds in your PayPal balance immediately. Paypal is also very highly trusted among consumers. When Paypal is an option, it is very likely that your customer will choose Paypal to process their payment. People really feel a sense of security when checking out with Paypal. Stripe has a waiting period of a couple of days before your funds are released, which I don’t really care for but that’s a part of doing business.
Your payment processor allows you to monitor sales, pull reports, look at recurring buyers and look at previous year comparisons. There is a lot of very informative data you can pull from your payment processor that will help you in the financial dealings of your business.
Now, let’s talk about Cash App. I personally do not use Cash App for business purposes…. Ever. Cash App was designed as a peer to peer money exchanging app. After gaining popularity, the option to have a business account was implemented. I have used Cash App in business before and I did not have a pleasant experience. Somehow my bank account needed to be reverified after a transaction and I ended up having a few hundred dollars in limbo. The funds weren’t in my cash balance but it wasn’t transferred to my bank account. There is no direct line to speak to someone in customer service so I had to send an email and wait for someone to get back to me. All in all it took about a week to get things straightened out. I’m not sure about you but if something is going on with my funds, I would like to speak to someone at that moment. I have to send an email? And wait for someone to get back to me? In one, two, three days? I don’t think so. Cash App also has a lot of room for error ie, sending money to the wrong cashtag (Yep, that’s happened to me as well). In addition to the limited customer service interaction you receive, Cash app doesn’t have the accounting and reporting capabilities like the other processors. And this is just the tip of the iceberg. At the end of the day, Cash app is just a bit sloppy and isn’t a good choice to rely on for your business activities. I would only use Cash App as a very last resort as a backup system…. Way back.
It’s always a good idea to have multiple payment options so take a look into these systems, set up an account, do a few test transactions and see which ones you think will best suit your businesses needs.
Once the cash starts flowing in your business, you want to make sure you are maintaining good spending habits. Make sure you check out this video about the 4 most common ways small businesses waste money. Are you guilty of one of these?