What should you look for in a payments platform? Learn five essential questions that you need to ask a potential payment processing provider before making a decision. By FINSYNC Small business payment processing can get complicated, starting with choosing a provider. What exactly should you look for? Should you focus on security? Affordable prices? And what about integration with your existing platforms? While there will always be needs specific to your small business, there are some general boxes a good payment platform needs to check to optimize your payments. In this article, we’ll review five essential questions to ask a potential payment processing provider to ensure you’re making the right decision for your business.
#1: How Is Their Security?People are still wary of sharing their credit card details online, especially when it comes to a company credit card. Therefore, security is perhaps the most important area where your payment platform needs to shine. There are a few best practices you can look for when researching payment platforms. The first one is a double-blind system, where the payment platform withholds financial information from both parties. You will never see your customers’ bank account or credit card data, and they will never see yours; the payment platform alone is responsible for keeping the information safe. The second practice is compliance with the official industry standard: the Payment Card Industry Data Security Standard (PCI DSS). “PCI Compliance”, as it is generally referred to, is an important standard for payment platforms, and compliant companies will typically display it visibly on their website. If not, all you need to do is ask.
#2: Do They Accept All Common Payment Methods?Confirm if the payment platform offers the payment methods your customers are most likely to use. Electronic payments such as credit cards and ACH payments are the two most obvious ones, but don’t forget about checks. According to Goldman Sachs, as many as 80% of all small business invoices are still paid by check. Accepting checks can be a demanding process for a small business. However, it can be made easier if your payment platform offers a lockbox service, where checks are processed for you and converted into ACH payments.
#3: Does the Payment Platform Offer Robust Customer Support?If the worst happens — a disruption in your payments — how quickly will your payment platform respond? After all, your payment platform is your livelihood. Any disruption in your payments might have a negative effect on your cash flow. If that happens, you need to be sure the payment platform you use will respond quickly. To be sure, you can ask:
- Where their customer service is located
- If they offer 24/7 support
- What other resources are available, such as FAQs and video tutorials
#4: Can the Payment Platform Integrate with Other Software?Your payment platform will have to be integrated with your other software to make sure your day-to-day operations run smoothly. Depending on what type of small business you run, you may need to integrate with:
- e-commerce software
- accounting software
- analytics provider(s)
#5: What Is the Price Structure?Some payment platforms charge a flat fee, while others have transaction-based pricing. No pricing structure is necessarily better than another. What is best for your business depends on how many transactions you have per month, how much security you need, and what additional features you want. However, you can expect to pay all or some of the following fees:
- Transactional fee - a fee you pay for each payment to the payment provider. Typically this fee is a mix of a percentage of the amount and a set small fee for card payments and flat fee for ACH and check.
- Interchange fee - this is the fee an issuing bank charges for use of their cards. This fee is typically captured in your transaction fees.
- Monthly or annual fee - a fee you pay for using the payment platform, on top of the transactional fees.
- Batch fee - payment platforms will batch payments together and deposit them once a week to your account. Sometimes there is a separate fee for that service.
- Chargeback fee - if a payment is rejected, you will most likely incur a fee.
- User seats - some platforms let you have as many users as you need. Others charge per additional user, typically monthly.
Choose a Platform That Meets the Needs of Both You and Your ClientsChoosing a payment platform can be tough, but ultimately you need to focus on how it can best serve you and your clients. Your clients care about using their preferred payment methods. They also want their payment information to be safe from hackers. Of course, security is also important for your payment information, as it is equally vulnerable to hacks and accidental leaks. Beyond security, small businesses should look for excellent customer service, reasonable prices, and easy integration with your existing software.
Giving your clients more payment options, including credit card, ACH and check, is easy with FINSYNC. By FINSYNC Credit cards are quickly becoming a popular payment method among small businesses. They’re fast and convenient, not to mention paying by credit card allows you to take advantage of a number of perks and rewards. It’s also a great way to make sure that salaries and bills are paid on time, even in months when cash flow is a little tight. Your own cash flow might benefit from accepting credit cards as a payment method as well. Few carry cash to pay for business expenses, and checks can take longer to process. With checks, you’re also relying on banks and the post office to expedite the process (which sometimes doesn’t happen). So, how can you accommodate your clients who want to pay by credit card — and improve your own cash flow management in the process? With FINSYNC, there are three simple steps to accepting credit card payments.
Step 1: Apply For a Merchant AccountWith FINSYNC’s payment software, you can accept both credit and debit cards. But first, you must apply for a merchant account, which is quick and easy. The application takes no longer than five minutes. It’s smart to have the following information on hand to speed up the process:
- Legal business name
- Business category and type
- Ownership type
- Federal Tax ID (EIN)
- Business address
- Authorized signer information
- Bank information for your business
What Is a Merchant Account?A merchant account is a type of bank account designated for credit and debit card payments. There are three parties involved in creating and managing a merchant account: your small business, a merchant bank, and a payment processor. When a client pays you with their credit card, the funds are first transferred from their card to a separate merchant account before they are deposited in your business account.
Step 2: Send a Payment Request or Charge Card DirectlyNow that you’re all set up with your own merchant account, you can send out payment requests for your work. Here you have two options. The first option is to send a payment request to your client and let them choose their desired payment method. All you need is an email address for your client. They will receive free access to the payment portal, where they can pay the invoice with their credit card. Additionally, you can charge their credit or debit card directly if you have a pre-existing agreement with your customer. This is by far the most convenient way to pay and get paid. You will get paid much quicker, and your client only needs to provide their payment information once. You can also use direct payment processing for one-time payments. All you need is the credit card information, which you can input manually and run the payment on the spot.
Accepting Credit Card Payments Through FINSYNCAll direct charges on your clients’ credit and debit cards are processed in batches. All that means is you won’t receive the payment in your bank account the moment a card is processed. Instead, all credit card charges are gathered and processed at the end of the working day. Once that’s complete, the total sum is deposited into your account. This is something to keep in mind if you’re selling physical products that need to be shipped, or you’re waiting to continue working on a project before you receive the next installment. It might take a few days before the payment arrives in your bank account. Eager to offer more payment options to your clients? Get a free trial of FINSYNC to start accepting credit card payments along with ACH and checks with minimal effort on your part.
Learn how electronic payments can streamline your business operations and free you from having to manually deposit checks. By FINSYNC Shelter-at-home orders and lockdowns have forced many small businesses to close their doors and start working remotely. If you’re among them, you’ve probably had to get creative to find ways to keep your business up and running during these tumultuous times. If you’ve been worried about how you’re going to get paid now that your clients are confined to their houses, now could be the time to embrace electronic payments. This is especially true if your small business still deals with paper check payments. Let’s look at how going digital can help your small business simplify payment processing.
Credit Card Payments Provide ConvenienceIt’s safe to say that people are likely to use more credit and debit cards than cash and checks for the foreseeable future. As a small business, it’s vital to accommodate this new purchasing behavior if you want to maintain a healthy revenue stream. An intuitive payment platform can make it easy to adapt to these changes and allow your customers to pay you from the comfort of their homes. FINSYNC makes it simple for you to accept credit and debit cards, even if you don’t have an existing merchant account set up. Approval is typically the same day, so you can be up and running in no time. Better yet, you can easily use credit cards to pay for traditonally cash-only expenses with only an email address, which can give you more control over your cash flow in uncertain times. Accepting credit cards doesn’t involve any additional work on your end. You simply send an invoice through FINSYNC, and the client gets access to the secure payment portal, where they can choose their desired payment method. For you, processing credit cards will look no different than ACH processing. If you have clients that insist on paying by check, there’s a solution for them as well. You can continue to accept checks, but enjoy the benefits of electronic payments with a lockbox.
Get Paper Checks Deposited Automatically with a LockboxA lockbox is a bridge between traditional and digital businesses. It allows your business to go paperless with payments, even when you’re working with a customer that pays by check. Using a lockbox is the easiest way to streamline payment processing without alienating clients who prefer to pay with a paper check. Traditionally, lockboxes were only available through banks and offered to companies with a high volume of checks. This meant that small businesses were often unable to enjoy the benefits of a lockbox. However, with FINSYNC you can have a lockbox regardless of the size of your business. FINSYNC Lockbox acts as an inbox for your checks. As a bonus, your paper bills can also be sent and processed in the same way. If you have a vendor that absolutely insists on receiving a paper check, you simply need to collect their remittance address. FINSYNC will draft the money from your account, and send a FINSYNC check to your vendor. Together, both of these features can make remote work easier and more efficient.
Benefits of Lockbox for Small BusinessesOne of the main benefits of a lockbox is, of course, mobility. You can get paid no matter where you are. With FINSYNC Lockbox, all checks are deposited automatically and payments are matched to the corresponding invoices in your accounting system. In other words, your accounts receivable is completely automated. If a check cannot be matched to an open invoice, it will still be deposited in your bank account, but you will be notified immediately to take the right course of action. FINSYNC Lockbox makes managing accounts payable easier as well. All bills are scanned and uploaded to the platform. Then it’s up to you to approve and pay the bills. Together, these features streamline your payment processing and result in money and time savings.
How to Enable Lockbox in FINSYNCYou can set up FINSYNC Lockbox for your small business in a few easy steps. Start by logging into your FINSYNC account. Go to the “Income” tab and choose “Settings.” Under “Settings” you will see the option to enable Lockbox. Once you tick “Yes,” you will see your Lockbox address below that. You can now start using this address and providing it to clients. The address will automatically be included on every invoice you send out. The same goes for the payment portal if your clients choose to use it.
Take Advantage of Electronic Payments in the Time of CoronavirusElectronic payments have multiple advantages. First, you can easily accept credit and debit card payments from your clients. Not only does this help encourage social distancing, it also makes it easier for you to work from home and get paid in a timely manner. Secondly, with FINSYNC Lockbox, your small business can accept checks and still get all the benefits of electronic payments. With a dedicated lockbox, you don’t have to leave the office to deposit checks, or spend time reconciling the invoices afterward. Start a free 7-day FINSYNC trial to see how electronic payments can benefit your small business.
On March 26, 2020, Nathan Page, FINSYNC Director of Customer Implementation, led a webinar explaining how to quickly and securely receive payments from your customers. All FINSYNC customers were invited to participate in the webinar to get a better understanding of receiving electronic payments using the FINSYNC software. The three main topics that were discussed during the webinar were tips for setting up your income tab, receiving payments, and what customers see when they pay you.
The Webinar Video RecordingClick the video below to watch or listen to the full webinar recording. [embed]https://www.youtube.com/watch?v=m3-XI-HU_58[/embed]
Tips for setting up your income tab: (2:41)
- Enable Bank ACH Payments: (3:30)
- First, start off by visiting the income tab. Then, in this tab, you will be able to add your business information. Lastly, you will have several options to fill out, as well as the option to include your logo.
- Selecting your default accounts in which you will be receiving and sending payments.
- Fees for ACH are .50 cents per transaction for both incoming and outgoing payments.
- Get Paid Via Charge Card with Your FINSYNC Merchant Account (7:04)
- Works for sending out payments through bill pay or to receive payments via credit card.
- Typically you will receive an answer in 1 business day regarding your application.
- No fees to apply.
- Great way to allow your customers to pay via credit card and fast turnaround time.
- Fees are 2.9% and .30 cents on each transaction.
- Receive Checks Through Lockbox (8:17)
- Create a paperless workplace for those customers who don't want to fully switch to ACH.
- Located in Atlanta and monitored by the FINSYNC team.
- FINSYNC deposits the check on your behalf and then transfers the funds into your account.
- There is a flat fee of $1 for using the lockbox service.
- Additional Settings (9:07)
- Invoice and order numbering have the option to be manually entered or automatically generated
- Recurring invoices are an option, with the ability to select when you want to get paid. For example, net 15, 30, or 60.
Quickly and securely receive payments from your customers by ACH, Check, Debit, or Credit Card (10:46)
- Creating and sending payments requests (12:34)
- Skip to minute 12:34 in the video to view the demo on creating payments.
- Recurring invoices (19:34)
- In the settings, you have the ability to select several components. For example, frequency, starting date, and due date.
What customers see when they pay you (21:32)
- FINSYNC Invoice Email (27:45)
- The invoice the customer receives in their mailbox is FINSYNC branded but will include your business name.
- Your company logo will show once they click to view the invoice.
- Customers have the ability to download a PDF and pay automatically.
- Creating a “FINSYNC Limited Account” (29:05)
- To view how to set up a limited account skip to 29:05.
- Quick and easy to manage.
- No fee to create an account. Upgrade only needed for certain functions.
- Your Customer’s Payments Inbox (30:44)
- For a full view of customer’s payments inbox skip to (30:42)
- Customers have the ability to pay right away with their bank account information, accept and pay later, or reject.
- Storing Payment Information for Future Use (32:28)
- Send future payments simply by using a login and password
- Double-blind bank-level security
- Password protected information
Questions & Answers From The FINSYNC Payments WebinarAfter discussing more information about receiving payments, we opened up the mic to all attendees for questions.
Q: How can I add “Lockbox” to my invoices as clients question the PO Box not being the name of my company? (24:01)
- A: That information is controlled under the company profile settings. The company profile stores your business information. Towards the bottom, you will have the primary contact information, which is where you will be able to edit the information.
Q: What information is needed to process an ACH payment? (26:32)
- A: From a customer perspective, the only information needed is, bank name, account number, routing number, and what type of account is it: checking or savings account.
Q: Does FINSYNC offer one on one consultations/ demos? (35:22)
- A: Yes, we offer this as part of onboarding through implementation. We’re happy to schedule demos to set you up for success with the software!
Q: Can invoice reminders be customized? Are they global reminders or can they be custom for each customer? (35:52)
- A: Those are set up on invoice level each time you send them out. They are not global settings. There is customization in terms of each invoice has a set of reminders you can choose before sending.
By FINSYNC Did you know using a credit card to pay for business expenses means having more ways to maximize control over your cash flow? It’s true. Carefully managing cash while shelter-in-place is causing the economy to slow down can be crucial for keeping your business going. Paying more expenses with a credit card gives you the freedom and flexibility your business needs.
Pay Anyone, Any Bill, Anywhere, with a Credit CardCovering business expenses with a credit card enables you to pay your vendors on time. From anywhere while mitigating the risk of being short on cash. Whether you need inventory or just need to pay office rent, paying with a credit card maximizes your opportunities. You only need an email address.
Help Keep Your Business Running During Shelter-At-HomeIn addition to leveraging your credit card more often, you can also reduce your risk of contracting COVID-19 by utilizing FINSYNC’s Lockbox. With Lockbox, you simply direct your customers who pay by check to mail their checks to your Lockbox. Then, FINSYNC deposits the funds for you. You never have to touch the mail.
Protect Your Account DetailsBeyond the health implications, adopting FINSYNC Payments is more secure from a fraud perspective. Whether you transact with customers and vendors by ACH, paper check or with a charge card, you never expose your account and card numbers. You do not have to worry about their cyber-security policies.
Now Is the TimeWhile shelter-at-home certainly causes business owners to rethink policies and procedures, it’s also a great time to improve efficiency, security and lay the groundwork for future success. Adopting FINSYNC’s tools for payments and cash flow management is as easy as starting a free trial. Even better...for businesses that are feeling the effects, you can request your subscription fees be waived until the economy opens up. All you have to do is ask!
What makes FINSYNC stand apart from QuickBooks? Learn the fundamental differences between the two software platforms, and how FINSYNC can make payments easier for your small business. By FINSYNC When you started your small business, accounting was probably not at the top of your list of priorities. Still, it’s an essential part of running a business, especially when it comes to paying your bills. Many online accounting software platforms offer help in that area, and at first glance, their features seem fairly similar. After all, the process of paying a vendor is pretty straightforward, so shouldn’t choosing accounting software be the same? In reality, it’s not. The process of paying a vendor typically looks something like this: Step 1: Log into your software of choice Step 2: Click the “Make a payment” button Step 3: Choose a vendor, or register a new one Step 4: Enter payment details Step 5: Make a payment However, different software platforms have different features for some of these steps, which can either save or add hours of work to your team’s already busy schedule. That’s time that could be better spent elsewhere. Let’s look at how FINSYNC’s payment process compares to QuickBook’s process for making payments. We will focus on steps 3 through 5, since that is where the differences become apparent.
More Payment Options for Your BusinessWhen it comes to the interface, both FINSYNC and QuickBooks offer a user-friendly shortcut to start a new payment with one button. The real differences come into play when you need to set a payment method for your payment/vendor. With QuickBooks, you can only choose between a bank transfer or a check. With FINSYNC, on the other hand, you can additionally pay your vendors with a credit or debit card.
Utilize Your Credit Card as a Payment MethodCredit cards are quickly becoming a popular payment method for small businesses because they’re easy and convenient. The benefits credit cards offer cannot be underestimated. For example, if you run a small interior design firm, it doesn’t matter if the company where you buy furniture for your clients only accepts ACH payments, while the florist you prefer will only accept checks. You can still charge both of those expenses on your credit card and only have to deal with one payment a month — the due date of your credit card bill. FINSYNC makes it simple to pay cash-only vendors with a credit card via an email request. It’s equally easy for you to accept credit card payments, typically getting approved the same day you apply. Having a credit card payment option also helps with cash flow management. With FINSYNC, you can utilize your credit card at times when you have to make payroll and invoices from vendors are piling higher than the cash balance in your bank. Lastly, pushing more of your expenses to charge cards gives you more access to rewards such as cash-back or travel points.
Vendors Choose Their Preferred Payment MethodWith FINSYNC, your vendors also get the freedom to choose the most convenient way to get paid. This ability relieves you from gathering and safely storing your vendors’ payment information (which is another problematic step we’ll address later) and keeping it up to date. Once you send a payment to your vendors using FINSYNC, they can choose how they want to receive the payment. Even if they choose a check, FINSYNC will take care of the payment. This feature can save you a great deal of time.
Vendors Get a Free Payment PortalWith FINSYNC, vendors can receive payments without creating an account, but if they choose to create their own account, it is 100% free for them to sign up. The process is also significantly easier to complete in FINSYNC than in QuickBooks. The free portal offers detailed payment information that exceeds what traditional ACH payments and checks can provide. When you send a payment in FINSYNC, you have the option to add both attachments and descriptions to the payment. This functionality eliminates the need for extra phone calls and emails to clarify what invoices were paid and when you paid them. If the vendor needs a copy of the invoice or clarification of a specific charge, they can take a look in the portal. All past information is stored once they create a profile. Consequently, the reconciliation of payments is much easier on their side, which is an added bonus for the vendors. There is also an additional layer of security that comes with using FINSYNC as opposed to QuickBooks.
Double Blind Payment ProcessAnother big advantage FINSYNC has over QuickBooks is the double-blind payment process. It doesn’t matter if your vendors prefer ACH payments or checks. The routing, account, and payment information for both parties won’t be shared. This double-blind process offers significant security protection for both you and your vendors. Unlike QuickBooks, FINSYNC stores all payment information internally without ever exposing it. This way, your data is safe from security breaches, and you don’t have to take extra precautions when it comes to cybersecurity to protect sensitive payment information.
Benefits of FINSYNC for Vendor PaymentsBy choosing FINSYNC’s payments platform, you get the freedom to use the payment method that’s most convenient for your business. This choice saves you time when processing different methods of payments from different vendors, and you can take advantage of the benefits that paying with a credit card can provide. Furthermore, your payment information is always secure when you pay your vendors through FINSYNC. They never see your routing or account information. You also never see theirs, which relieves you of the burden of data security. Bottom line? FINSYNC’s payment platform offers more flexibility, more options and more security than QuickBooks. But don’t take our word for it. See what small business owners who have used both platforms have to say about their experience. Or, see how FINSYNC can help you pay vendors with less hassle firsthand with a free trial.
Using a single platform to make and receive all small business payments has significant advantages. Learn three reasons why you should consolidate business payments and simplify payment processing for your business. By FINSYNC As a small business owner, you need to be able to track what you owe your vendors and what your customers owe you. Staying on top of these things means not overpaying for goods and services, and getting paid for your work on time. This ultimately makes a difference in your cash flow. Cash flow is, in its simplest form, payments into your business and payments out of your business, and managing it will mean avoiding disruption and capitalizing on opportunities as they arise. Larger companies usually have two departments to handle this: accounts payable (vendor bills) and accounts receivable (customer invoices). As a small business owner, you may be performing the role of both of these departments, on top of every other responsibility you have. Common advice for small business owners is to be proactive when it comes to accounts payable and accounts receivable. Business owners should regularly review outstanding customer accounts, send out reminders, and even get on the phone if necessary. Better credit policy and shorter transaction cycles are also recommended to encourage customers to pay on time and get better terms with vendors. While there is merit to many of these actions, they all pale in comparison to automation.
Can You Automate Payments?Using an all-in-one accounting platform to consolidate all payments allows for quick access to all of your financial transactions. Also, you can more easily track anomalies such as frequent late payments from clients or incorrect invoices from vendors. If collections are a challenge for your business, you can even set automated reminders for problematic customers.
There are three main benefits of using an all-in-one payments platform like FINSYNC to issue and receive payments — both for you and for your clients.
Benefit 1: Consolidation — Payment Processing in One PlaceHave you ever lost a check in the mail? Or searched through your email inbox to find a supplier invoice that’s overdue? Have you ever received an ACH payment in your bank account, and you didn’t know who sent the payment, or to which invoice it should be matched? This is a reality for many small business owners. Not only is it stressful, it’s also a waste of valuable time. By implementing an all-in-one payment and accounting platform, you’ll have only one interface that gives you a detailed overview of all your incoming and outgoing payments. No need to manage more passwords or learn different systems, which saves you time and streamlines your payment processing. FINSYNC’s platform isn’t only convenient for you, it’s also beneficial for your customers and vendors.
Benefit 2: Convenience — Accept and Use More Payment MethodsFINSYNC’s platform is flexible for receiving payments and sending payment requests. With FINSYNC, you can issue and accept payments using credit cards, ACH, and checks. You can even receive paper checks without the need to physically cash or deposit them. First, the check goes to a secure lockbox. Then, it's converted to an ACH deposit, with status updates throughout the process. Don’t have a merchant account for credit card processing? No problem. FINSYNC’s platform makes it simple to apply and get approved the same day. You can also pay vendors that traditionally only accept cash payments with a credit card.
A Small Business Payments ExampleLet’s see how this would work for a graphic designer named Josh. Josh has three clients: Sarah, an event manager who prefers to send checks in the mail for invite designs; Peter, a young entrepreneur who needs to put the expenses for Josh’s services on a credit card; and Samir, a marketing manager who works at a big company that processes all payments using ACH. Normally, accepting all three payments manually would be time-consuming for Josh. But with FINSYNC, Josh can send out all three invoices through the same interface, and Sarah, Peter, and Samir can choose the payment method they prefer to use. Another added benefit of payment processing through FINSYNC is the fact that you can issue invoices with as much or as little information as you may have. You can make a payment or request a payment using just the recipient’s name and email address. This functionality solves the problem that often comes with ACH payment processing and checks: data on check and ACH deposits in your bank statements is minimal. In FINSYNC, all transactions include attached remittance details that both parties can see. In the case of Josh’s payments, that means he can see that payment has been made once it happens. He knows specifically what the payment was for. Lastly, his invoice statuses and accounting update automatically. That’s saved time that otherwise would be spent checking his inbox or getting on the phone to figure out who paid what.
Benefit 3: Security — Secure Payments for You and Your ClientsCredit card processing, checks, and even ACH payments come with a risk. When your payment information is stored with a third-party, your data is exposed to the risk of security breaches and misuse of payment information. On the other hand, as a small business owner, the responsibility for storing payment information lies with you. Therefore, you have to take extra steps to make sure your data storage is secure against cyberattacks, which means more expense. When you use FINSYNC, there’s no need to worry about extra security. FINSYNC never exposes payment information to any party. Neither you nor your vendors store payment information; FINSYNC does it for you. For example, when Josh sends Peter an invoice, he includes a link to the payment portal for payment processing. Peter’s credit card information is never stored on Josh’s servers. Josh never sees the account numbers either. An added bonus is that it’s free for Peter to use the payment portal.
All-in-One Portal for Convenience and SecurityConsolidating your business payments — payables and receivables — on a single platform will save you a significant amount of time. Additionally, you can offer more payment options to your customers. This will make them more likely to work with you in the future. FINSYNC’s all-in-one payment platform also acts as a third-party that makes your transactions with customers and vendor double-blind. That way no one has to worry about exposing or securing account numbers.
Learn how ACH payments provide a more secure, efficient way to make small business payments, and how FINSYNC can help. By FINSYNC The world is quickly becoming a digital, paperless place, yet half of all small businesses still use checks to make payments. Take Sara, for example. Sara runs her own custom print shop. She works with a lot of smaller vendors that only accept checks, and a lot of one-off clients that prefer to pay her at the end of the day, but don’t carry a lot of cash. Sara’s story isn’t unique — many businesses choose checks over online payments. Some use checks because of familiarity, others because they’re universal, but many choose to pay by check because of cost, security, and cash flow management. However, many of these reasons are based on misunderstandings and myths that prevent small businesses from reaping the benefits of ACH payments.
What Are ACH Payments?Before we dive into how ACH payments can benefit your business, let’s take a look at what they are and how they work. ACH stands for Automated Clearing House payments. These electronic payments allow a vendor to debit a customer’s account for the amount due. The customer gives the vendor authorization to do so by providing their routing number and account number when the customer agrees to pay.
A Cheaper Way to Get PaidMany businesses think that checks are a free way to make and accept payments. However, that couldn’t be further from the truth. The real cost of a check varies from $3 to $20, including the cost of paper, stamps, and envelopes, as well as labor hours that are used to mail and reconcile checks. In addition, canceling a check can cost $20 to $30. If Sara completes two one-off projects per week, for which she collects checks, that leaves her with eight checks a month, which are going to cost her anywhere from $24 to $160 a month to process. That adds up to between $288 and $1,920 every year, doesn’t include paying her suppliers by check. ACH payments, on the other hand, have a flat transaction fee of around $0.50. While there is some manual labor involved in making and receiving payments online, it’s not nearly as time-consuming as making payments with physical checks, and accounting happens automatically when ACH payments are connected to invoices or bills.
A Better Cash Flow OverviewSome businesses operate under the idea that the delay that comes with processing checks offers more liquidity and gives them more control over their cash flow. While that idea may be true for a small number of businesses, it applies only to very specific circumstances. For the most part, ACH payments offer better cash flow because ACH funds become available faster. On average, ACH payments are processed within three business days. Paper checks can take up to eight business days. That is not including the time it takes for the US Postal Service to deliver a check in the mail. Five days might not sound like a lot, but it is. For a business like Sara’s, where 25% - 30% of her revenue is paid in checks, switching to ACH payments provides a more accurate cash flow projection for her business on a weekly basis. ACH payments can bring additional value to your business if you make them through FINSYNC’s payments platform. The all-in-one platform automatically matches payments with your accounts receivable and accounts payable, which saves you a lot of valuable time. If you’re already using FINSYNC, enabling ACH payments for your account is simple.
ACH is More Secure than a CheckMany businesses are reluctant to share their bank account information with vendors. This is due to the risk of a data breach, and have therefore stuck to check payments. Unfortunately, using checks doesn’t always protect you from fraud. In fact, about 70% of all organizations experienced check fraud in 2018, according to JP Morgan. Checks and ACH payments use the same information to process payments:
- Routing number
- Account number
- Payment number
Save Time and Money With ACH PaymentsACH payments offer several additional benefits over paper checks. ACH payment processing times are much faster. Meaning you will get paid faster and have more control over your cash flow. ACH is also a less expensive way to get paid, and using ACH frees up valuable time. If you use ACH through FINSYNC, you can also save time on the reconciliation of accounts payable and receivable, which happens automatically. FINSYNC also makes payment via ACH more secure, because your routing information is never exposed to your vendors. New to FINSYNC’s payments platform? Try it free for a week, and see how your small business can benefit by streamlining back-office tasks, starting with payments.
Save time and make your small business accounting more efficient with these hacks for streamlining payments. By FINSYNC As a small business owner, you strive for maximum efficiency, whether it’s related to sales, accounting, or marketing. Your time is, however, finite, and it’s not always clear where you should focus your efforts. That’s why we’ve developed a new series of blog posts about the different ways you can manage your finances to save time, money, and effort. That way you can focus on growing your business. The first topic we’re going to address in this series is payments. If your clients don’t pay you, or you don’t pay your vendors, your business will come to a standstill. In today’s business landscape, streamlining and enhancing security on your payments can be a business advantage that will help your business grow faster.
The Need for Small Business Owners to Streamline PaymentsIf you’re like a lot of small business owners, payments and other accounting tasks fall on your desk at the end of the month. These tasks are sometimes deemed “a necessary evil” because of how costly and time consuming they are. In fact, nearly 40% of small business owners spend more than 80 hours a year on payments and other accounting tasks. The cost of those hours, and other services that still need to be outsourced, lay between $5,000 and $20,000 for 46% of small business owners. Dealing with payments is one of the tasks you can, and should, streamline. In fact, an inefficient payment system can actually have a negative effect on your business. It can prevent you from paying yourself, your employees, and your vendors on time. Which can have disastrous results. Business development plans, marketing budgets, and hiring can suffer as well. On the other hand, streamlining your payments can help you get on the good side of your customers, and get a much better overview of your cash flow. Fortunately, streamlining your business payments doesn’t have to be difficult.
How to Streamline PaymentsEfficient payments start with an efficient payment system. There are three areas where you can streamline your payments: customer invoices, vendor payments, and the way both are reconciled in your accounting. Ultimately, a good system should cover all three areas.
Spend Less Time Getting PaidFollowing up on unpaid invoices is, perhaps, one of the most time-consuming tasks related to payments. It’s time that you or an employee spends on status emails and phone calls, which can be better spent on other tasks. Save time by setting up automatic reminders that let clients know when an invoice is overdue. You’ll want to do the same for recurring invoices. To take it a step further, you can make it easier for your clients to pay you. That means providing several payment options, such as ACH, credit cards, or checks, along with easy access to invoice information. Clients should be able to access invoices without searching frantically through their inbox or getting on the phone with you. All of this can be achieved with an all-in-one platform that provides your clients with a secure payment inbox. With a system like FINSYNC, clients are provided with a portal where their payment information is stored together with all the invoices you have issued. This means that you don’t have to store payment details for your clients, and can rely on FINSYNC to do it for you.
Pay Vendors with Any Payment MethodPaying vendors can be tricky, mainly because some may prefer getting paid by credit card, while others might only accept checks or ACH. A big part of streamlining your payments is finding a system that lets your vendors accept payments from you in a way that’s convenient for them. FINSYNC Pay is one such system that provides both convenience and security. Your vendors don’t even need to sign up for an account to get paid, and they can receive payments directly into their bank account. With a system like FINSYNC, you can even use your credit card to pay for goods and services that typically are cash-only.
Sync Payments and Accounts AutomaticallyOnce you’ve made sure that your customers can pay you with ease, and your vendors are getting paid on time, it’s time to make sure all those payments are recorded the right way. A lot of that work will fall under the responsibilities of your bookkeeper. You as a business owner can make that job easier for them. An all-in-one solution such as FINSYNC will help you along the way. Because the system incorporates payments, bookkeeping, accounting and more, the payments that you make and receive will be automatically matched with corresponding invoices, and accounting entries for sales accounts receivable, accounts payable, cash and more occur automatically as you work.
Streamline Your Payments With FINSYNCIf you’re looking to simplify your business payments, FINSYNC might be a solution for you. This all-in-one platform combines accounting, payments management, bookkeeping, and cash flow management. You can also optionally upgrade with projects and payroll. FINSYNC allows you to automate your back office. That way you can focus on the most important tasks as a small business owner. Try FINSYNC free for a week to see how the platform can help you run your business more efficiently.
A good payment provider should offer simple, secure and flexible business payments to streamline your cash flow management. By FINSYNC Choosing the right online payment service provider (PSP) can be intimidating. Nonetheless, relying on the right PSP to send and receive payments is absolutely critical for your business. Knowing what to look for in a payment provider can help you choose the best one for your business.
What is a Payment Service Provider?A payment service provider is a service that enables your business to make payments to vendors and receive payments from your customers. PSPs connect businesses (you) with vendors/merchants and the various institutions (banks, credit cards, etc.) from which your funds will be transferred. A payment service provider typically offers businesses the ability to make and receive payments from a variety of payment methods including credit card and bank-based payments such as ACH and wires. Payment service providers generally handle the entire payment transaction. They facilitate the transfer of funds from your account to your vendor’s account. However, not all payment service providers process every type of payment. Some specialize in processing online payments while others specialize in processing in-store payments. When considering PSPs, it’s important to consider the payment capabilities your business may need in the future.
What to Look for in a Payment Service ProviderBeyond basic functionality, there are three characteristics that you should look for in a payment service provider.
FlexibilityWhether you pay your vendors in cash or charge all of your expenses to your credit card, your small business needs access to payment software that enables easy payments. Regardless of the payment method your customers and vendors prefer. Payment flexibility enables your business to convert checks to ACH and pay a vendor with a credit card. Even if that vendor does not traditionally accept credit cards. The added flexibility to choose how you make payments can have a big impact on cash flow management. Vendors or PSPs that lock you into a specific form of payment can make it difficult to make use of credit to free up short-term cash for more critical business needs such as payroll. Alternatively, your PSP should make it easy for you to receive payments of all types. Making it too complicated for your customers to send money can slow down payments and add new cash flow management challenges. Look for a payment provider that gives you flexibility rather than restricting your payment options.
SecurityIt goes without saying that you want your payment service provider to be safe, stable and secure. There’s nothing worse than realizing that your business is financially vulnerable because your payment service provider has been hacked. You must also consider who your payment provider shares your financial information with. If payments made through check or ACH expose your financial information to your vendor or if you are tasked with protecting your customer’s financial information. This could further open you up to risk. Make sure your PSP enables your business to send and receive secure credit card payments without handing over your credit card information to vendors, thereby limiting your exposure to hacking and fraud.
Integrated SystemYou should also give heavy consideration to payment service providers that integrate payments within your existing accounting software. This enables you to build a database of customers, issue payment requests from internet-connected devices, attach remittance documents, and leverage a secure portal to pay your vendors. The biggest benefit to managing payments within your accounting and bookkeeping solution is having all of your financial information in a single dashboard. This offers forecasting and reporting that can help improve your cash flow management and better prepare your business for the unexpected. Other things to consider are the capabilities of the PSP beyond software. Does it come with basic functionality, or does it provide comprehensive consultation and support services that actually make it easier for you to conduct business?
Introducing FINSYNC PayNow that you know what to look for in a payment provider, two things should be obvious. First, you need a payment provider that is flexible, secure, and integrated with your accounting software. Second, you need a payment provider that offers functionality. One that actually makes it easier for you to receive money and pay your vendors. FINSYNC Pay gives your business the power to send and receive payments using ACH, debit and credit card with ease and peace of mind. It can even convert checks into direct deposit so you can send and receive all payments electronically even if you have customers or vendors who prefer a paper-based process. What’s more, FINSYNC Pay is backed by fraud protection, advanced monitoring, and provides greater privacy. If you’re looking for the best payment provider for your business, you need look no further than FINSYNC Pay.
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