Here are some of the choices that some of our clients have taken in order to bring cash into their bank account faster:
When D Jenkins started her business D Jenkins Designs a graphic Design company in November 2009 one of the decisions she had to make was around payment options.
“I went to my bank and my business specialist gave me several options, including cheque, mobile EFTPOS and BPAY. I did not like the sound of Cheque so I avoided it completely and mobile EFTPOS was going to cost me at a minimum $55 a month whether I use it or not. BPAY was the best option because it helps keep my costs down,” she explains.
FSD is a furniture outlet. The business offers Cash, Eftpos, Fund Transfer and Credit card. The business sees a huge amount of customers now using Visa and Mastercard to earn reward points. Initially, it was difficult to charge an extra 1% fee on top of the purchase and now it doesn’t seem to be an issue anymore, customers are now getting used to the extra fee when using credit card payments. It’s a matter of working out how to handle fees associated with these payments.
The business is also launched for online customers to pay their purchase by Paypal as many online customers are using this payment method too as it is safe & secure. They also made a clear decision not to accept Amex or Diners due to heavy fees and “we know every customer would have a debit card or a credit card on them so declining Amex & Diners was not an issue or loss of sales”.
Scoops Design invests in a mobile EFTPOS and participates in regular trade shows & Designer Market events. Offering this service was one of the keys to get funding faster into her business. She is now looking into B pay facilities for her wholesale business as this method will assist in reducing her cost down and more customers prefer to use this option to pay on line and by phone.
Food for thought:
At the end of the day, you need to make decisions and payment options that suite your business, even better if you could come up a win win situation for you and your customers.
- Accepting cash or cheques – means you need to go to the bank several times a week to deposit the cash and cheque.
- Although cheques are probably a safer option than walking around with cash. But you have to wait for the cheque clearance that could take up 3 working days
- EFTPOS and credit cards you can access the funds on the next working day except on the weekend.
- BPAY, a shorter one compared to the time for cheques to clear. The funds normally clear within 48 hours.
- With Paypal the funds clear normally within a day or two however, the only concern is access to funds you need to get to transfer to your nominated account and that will take up to 48 hours or more. This of course depends on the bank you with bank with. Paypal will take a fee for handling the transaction too.
Systems Implementation
- Accepting cash involves a cash register or investment in a point of sale system particularly for business owners who have shops or studios.
- If you don’t have a retail outlet, the cheaper options are EFT, BPAY & Paypal. BPAY has recently worked with a number of banks to offer smaller businesses a simpler sign-up process. More small businesses are offering BPAY because it’s now easier to implement and adds credibility.
- A plus for small businesses that some credit cards offer is automatic downloading of statements into popular accounting packages like MYOB or Quick Book. Most of the major banks allow you to download statements directly into a software accounting package, which means bank statements and accounting records are in sync, no matter how people pay your invoices. If you have a simpler booking system like an excel spreadsheet you can too download your statement into a excel spread sheet that will save time so you can do your account reconciliation.
So deciding which payment options to offer is about the balance between meeting customer needs and increasing business efficiencies, which depends on the nature of your business. Sometimes it is a matter of test and measurement to see what options are suitable for your business. The key is to make sure any system you have implemented into your business is communicated across to your people and ultimately to your customers.
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The clients mentioned above are happy for us to use as a case study and we have their permission to mention in this blog post.
