One of the first things a new small business owner does (or should do) is set up a business bank account. (Your personal checking or savings account is not the right way to do business!) Once that’s all in order and work is being done or products are being sold, the objective is to fill said business bank account. Consequently, there are a number of business payment methods that can make that happen…
Good Ol’ Cash
Especially for small retailers, cash is a big method of payment. At the low end of the spectrum, you can make daily or weekly trips to the bank to make your cash deposits. On the high end, an armored pick up does the job. Some banks even offer on-site safes with cash-scanning technology. Naturally there are costs associated with armored pick up and on-site safes.
This too is a bit of an old school way of getting paid but it’s still here, alive and kickin’. Most retailer business don’t take checks anymore, but for small businesses that are of the consulting type, checks are popular. The problem with checks though is that you still have to make the trip to the bank—unless your bank has mobile deposit. Ask them or check the App Store. But remember two things: 1. Just because your bank has mobile deposit for consumer accounts doesn’t mean they have it for business accounts… 2. There will likely be daily and monthly mobile deposit limits that might make this method useless to you.
Like cash and checks, there’s not a whole lot to say about credit cards. From a business perspective, they offer your customer convenience but, obviously, at a process cost to you.
“ACH (or Automated Clearing House) is an electronic network for financial transactions in the United States that processes large volumes of credit and debit transactions in batches.” (source) This is a particularly popular method of payment for business-to-business transactions.
If you’ve walked into a coffee shop recently, there’s a good chance you’ve seen an iPad at the register that has a little widget stuck into the headphone jack. This little guy is Square, a credit card reader that lets business owners get paid by credit card. There are fees associated, but Square is super useful for the entrepreneur who’s always on the go, meeting with clients or customers, etc.
LevelUp is another interesting mobile payment solution. It let’s your customers pay with their phones (that are hooked up to a credit or debit card) and also builds in loyalty rewards. And while there’s a 1.95% processing fee, you learn a lot about your customers and can thus run customized advertising back at them.
We’re all familiar with PayPal, especially if you’ve done any shopping online. But PayPal also makes it easy for online businesses to take a big chunk of risk out of getting paid either by PayPal or credit card. There are various tiers of service and costs.
The ways in which small businesses get paid seems to be evolving every day. And that’s a good thing so that you can find what’s right for you. Tell us on Twitter how your business gets paid.