As a business owner, you want to be able to accommodate your clients in various ways. One of those ways is how you accept payment for your products or services. It would be a terrible thing to lose a sales because you don’t accept a certain payment method.
There are basically only three forms of payment – cash, check or charge. While all business accept cash, most forms are payment are not made that way unless you are a brick and mortar business. And with an increase in check fraud over the years, fewer and fewer business accept personal checks.
So that just leaves charge.
So I am going to share with you some pros and cons of accepting credit cards as a method of payment for your business.
Convenient – Let’s face it, credit card are the most convenient form of payment, for you and your customer. You don’t have to take time out of your day to make a trip to the bank to make a deposit in hopes that a customer’s check doesn’t bounce by the time their bank receives it to honor the payment.
Access – When you accept credit cards as a form of payment you have access to your funds within 2-3 days instead of the 5-7 days associated with accepting checks.
Flexibility for customers – Customers are more inclined to choose you over a competitor if the only difference is that you accept credit cards and your competitor doesn’t. It’s quicker and easier for them. They are able to make purchases online or over the phone and don’t have to take the time and write a check and mail it.
Fees – As a business owner you will be charged a processing fee by your credit card company for the convenience of this service. This is a cost of doing business therefore it is a tax deduction. If you charge a customer this fee you no longer have a deduction because their payment will offset the fee you charge. Personally I disagree with charging customers this fee but that’s another post.
Fraud – Although there are tons of laws and security measures around protecting consumers and business from fraudulent credit activities, the fact of the matter is it still happens. The best way to prevent a big financial impact is to reconcile your bank accounts regularly and check your mail for letters from your merchant provider and bank for questionable activities.
More work – Unless your merchant account directly imports into your accounting software, there will be a teeny bit more work for your accountant or bookkeeper to do when entering transactions. There is an additional level of detail and another account to reconcile monthly.
How has accepting credit cards help or hurt your business?
All rights reserved. © 2013