Once upon a time, business was simple in that all transactions were in cash. Someone then complicated matters by introducing cheques as a form of payment, followed by credit cards, EFTPOS, and now various methods of online banking and Internet transactions.
Business today needs to provide a range of payment options for customers.
Some time back, I was in the market for several pieces of home furniture. After visiting a number of homeware stores I found what I was looking for. However, I ended up purchasing similar furniture from another store because that first store didn’t accept the credit card that I wished to use. They said, ‘We don’t accept that card because the merchant fees are too high.’ The profit they lost out on with me going elsewhere would have paid their merchant fees for several months.
Like it or not, plastic is the payment preference of choice for most customers. And what with free credit periods, fly-buys, frequent flyer and incentive points to be obtained everywhere, who can blame them? Modern accounting software also provides direct linkage to credit card accounts thus saving time and money in accounting fees.
It is therefore important that you accept all major credit cards including American Express, Diners, Mastercard, Visa and if you have Japanese customers, JCB cards as well. You may only be presented with some of these cards once a month, yet the profit on that one sale may pay the rent on your business premises for several weeks.
Many customers still prefer to pay for their purchases by cheque. The problem that sometimes arises is that a percentage of cheques have a habit of bouncing: this should not stop you from accepting cheques as a form of payment as there are many companies that provide instant cheque-clearing facilities. Some of these services require a phone call to be made, although electronic cheque ‘readers’ are now available. Sure there is a cost to these services, but the cost is minimal when compared to the lost profit on lost sales.
Electronic Funds Transfer at Point of Sale (EFTPOS) is now the preferred payment option for customers. The great advantage of EFTPOS is that the funds are deposited directly into your bank account at the time of the transaction. If you don’t have this facility, GET IT! Pay-wave for smaller transactions is also a must.
And if you currently have a minimum spend for EFTPOS … get rid of it. It annoys your customers to the max and it’s costing you business.
Most business customers now prefer to pay their accounts online via the Internet. Be sure to include all your bank account details on your invoices, so that your customers can pay you this way if they so choose.
And last but not least, accept cash. It maybe becoming rare, however you still need to accept it.