By utilizing some best practices in payment processing, shop owners can get their cash fast and reduce unnecessary stress.
Make Sure You Have 24
Many payment processing companies will be able to guarantee 24-hour cash turnaround, meaning that you can get the money your customers paid using debit or credit cards the next day. (This is true for Visa, MasterCard and Discover, but not American Express transactions.) Take a look at your agreement with your payment processor and make sure you are getting payments in your bank account within 24 hours. If you are unsure, call your payment processor representative. If that person cannot or does not offer that benefit, consider shopping around for a new partner.
“Debit or credit?” You and your staff probably ask this question many times a day. The answer, while not super important to many of your customers, could mean a lot for your cash flow. Debit card transactions are less costly than credit card transactions. This results in more cash in your pockets, which you can access the next day if you have next-day funding. Instead of asking your customers which they prefer, train your staff to ask, “Do you mind if I run this as debit?” Most people will agree, and your business will be better for it.
Better Batch Out
After a really long day of dealing with customers, employees, vendors and whoever else happened into the shop, you probably just want to close up and get out. But “batching out” reconciling and closing your transactions for the day is one of the most important things you can do to make sure you have cash on hand. Typically, businesses batch out when the shop closes, but in the payment processing industry, roughly 6:00 pm is the cut off. Working with your payment processing company, you can set up an automatic batch out before the cut-off time. That means that a majority of your transactions will be cash in your account by the next day.
Many automotive repair shops still take checks, which can be useful to their customers who are paying for big-ticket items but do not have cash on-hand. The downside is that money from checks is among the slowest payment options out there. The check is written, it is deposited in the bank, and it takes a few days to clear before it shows up in the business’ bank account. New technology is changing all that. Check guarantee terminals are now available to any retail business that takes credit or debit cards. It is simple to use. The machine scans the check and withdraws the money from the customer’s account instantaneously. The check itself can actually go back to the customers and the business sees the money the next day. Bounced checks, which can create an additional delay and headaches, are a thing of the past.
November 2009, Hancock Fabrics. March 2010, Mary’s Pizza Shack. April 2010, Mad Capper Saloon & Eatery.
You probably haven’t heard of any of these companies. They are small businesses from all over the country. But they have one big thing in common: they’ve suffered a data breach. The truth is that no business is immune to data breaches. If your payment processing company isn’t talking to you about the dangers of data breaches, you may have a problem. The payment card industry, made up of companies like Visa, MasterCard and American Express, has developed Data Security Standards that you must comply with in order to take their cards. They charge huge fees and fines if a business is not compliant, which could really be a pain for cash flow. Call your payment processor to make sure you are protected.