Don’t Start Celebrating Until the Check Clears! (Part four) Other ways of getting payment

Credit cardI have been discussing getting paid via check but there are other more secure ways of getting paid. The drawback, however, is that these all require that you pay fees of some sort – except for a United States Postal Service (USPS) Money Order.  [This method is perfect so long as the USPS has money in the bank.  (This viable condition may be short lived if Congress has its way.)]  Your customer may find it a pain in the neck to get the Money Order because he has to stand in line at the post office, so most will likely balk at this idea.  What may appeal to your customer is that he can use his credit card to get a USPS money order.

Another method is for you to accept payment via credit card.  I have been asked to do this several times over the years but I have chosen not to do it. There are a lot of considerations when setting up credit card processing. Two issues to be aware of are the processing fees assessed by your bank and how/when the transaction is authorized (guaranteed) by your bank prior to shipping product.

PayPal is one option for accepting credit or debit card payments. You can get the PayPal payment option easily set-up on your web site, but be aware that the fees for each transaction are around 2.9%.

My favorite way of getting paid is via wire transfer directly into my checking account.  Both you and your customer are charged a fee for this service, but I think it is slick, almost magical.  You know instantly when the funds are available in your bank account by monitoring your on-line account information.  Normally, wire transfers are only pending on the day of receipt and reconciled the next day.  The down side is that you and your customer need to get together to set the system up and as I said, both of you will pay a fee.  Fees for our company are $12.00 for each incoming wire and $45.00 for each outgoing wire.

I have never used a collection agency so I know very little about them.  Check to be sure you understand their fees and how those fees are assessed – you may end up with very little of the money collected. For myself, I have been effective at collections, so the desire to hire an agency has never been pressing.

The bottom line is that you need to be very serious and diligent about the collections aspect of your business.  It can truly mean life or death to your enterprise.

Angelo

How do you choose to get paid by your customers? Let us know in the comments below.

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