Running a small business can be a daunting task, especially since your main focus is growth. One of the major ways to help your small business prosper is by having reliable payment options. If you wish to increase your cash flow, it is imperative that you incorporate several payment methods. The numerous payment options will enhance your flexibility by ensuring that your clients pay you regardless of their geographical locations. By relying on different payment methods, you can also meet your business expenses easily. Here are some of the most reliable payment options for small businesses.
1. Cash
One of the most popular payment methods in business is cash. Before the advent of the digital age, cash was the main medium of payment. This method, however, is slowly running out of favor among consumers. Cash is a preferable option for small businesses because it costs nothing to process. You only need to collect the money from your clients and deposit it into your respective bank account(s). However, small business owners who opt for this payment option need to practice due diligence. You have to ensure to document all the cash payments because of tax audits. The IRS tends to focus a lot on cash transactions and any lack of accountability could see you pay hefty fines.
2. Credit cards
Plastic payment is also a viable payment method for small businesses. However, you need to know that this option will cost you a certain percentage of the money you transfer to complete any transaction.
Fees associated with credit cards include:
- Flat fees
- Transaction fees
- Incidental Fees
You can find different credit card companies that offer credit card processing solutions. Some of the most commonly used credit cards include MasterCard and Visa. Besides using the common credit cards, you could also check out Electronic Merchant Systems (EMS), a firm that offers e-commerce and mobile solutions to businesses.
3. Money orders
Have you ever heard of a money order? If you haven’t, it is an official document or a piece of paper that represents an amount of money that you can buy at a post office and send to someone as a form of payment. It is a reliable form of payment for a small business because it is highly secure. This is because a money order is only issued after the client has offered the sum of money that is represented on the money order. Money orders, however, are not among the common methods of payment these days, although they still work. Before accepting a money order, therefore, you have to verify its authenticity.
4. Checks
Like a money order, a check is a piece of paper that represents a specific amount of money to be paid. Lately, the use of checks as a payment option has decreased because business owners consider them risky, if not outdated. This is because when a client writes a check, the recipient cannot establish on the spot whether it is good or if it will bounce. Bounced checks can adversely affect your firm’s financial position, especially when they involve large sums of money. Before accepting checks as a form of payment, it is critical for you to adhere to the guidelines set by the Small Business Administration (SBA) to avoid dealing with financial problems later.
5. Online payments
Internet access has offered businesses vast opportunities to transact with clients that are far away. When such customers are involved, the most reliable method of payment is online payments. These methods have become a popular option because of their speed and reliability. Moreover, online payments are cheaper as compared to other transactions. One of the most commonly used online payment methods today is Bitcoin. It is a cryptocurrency that relies on blockchain technology to complete transactions between clients and small businesses.
6. Automated Clearing House (ACH) Payments
The last option on our list is Automated Clearing House payments. This is a convenient and reliable payment option that links billing accounts with bank accounts. The connection between these accounts allows users to make payments automatically. Furthermore, it is secure, fast, and less costly as compared to other payment methods.
Having several payment options in your small business will help to increase your customer base, which in turn improves your cash flow. The payment methods listed above are some of the most reliable ones that you could incorporate in the operations of your small business venture. It is imperative, however, for you to conduct a survey among your customers to establish the payment methods that they find convenient.