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You just provided your client with your product or service, and now it’s time to get paid. Should be pretty straightforward, right?
One would think ...
But that’s not always the case. You’re probably all too familiar with clients who don’t pay right away or forget to pay and don’t pay until you’ve sent them a couple past due reminders.
And even if you collect payment immediately after you’ve provided your product or service, you still run into problems like bounced checks and chargebacks (a disputed or fraudulent transaction that ends up as a loss for you) if you accept credit card payments. Things like this slow down your cash flow which is never a good thing for any business.
You’re not alone. According to new national research from WePay, 59 percent of businesses who have experienced cash flow challenges said it’s had a consequential to highly consequential impact on their business.
And it’s not just a financial impact—it also affects your well-being. The survey showed that 56 percent said the emotional impact was also consequential, and 44 percent said it had the same effect on the administrative side of managing payments. WePay’s survey also reported a 15 percent lower incidence of cash flow problems with business owners who use software that integrates payments.
There’s a lot that goes into getting paid and managing payments, especially if you’re manually processing them. But, more and more options that can help you streamline your payment process are becoming available—from stand-alone tools like mobile credit card readers to fully integrated cloud-based solutions. These products can help you get paid quickly, save time and money, and reduce stress.
More and more small businesses, and especially online businesses, are turning away from manual payment processes and relying on debit and credit cards, and online methods of payment like Keap Payments or PayPal as their primary source of payment from clients. However, there are still businesses out there using manual processes and only accept cash or check payments.
Like most small business owners, you’re wearing multiple hats, including the good old bookkeeper/accountant hat. Yeah, that hat. You know, the one that sucks up time and energy and causes quite a bit of frustration and heartburn. No offense to all the bookkeepers and accountants out there (we need you!), but 41 percent of small business owners said accounting was the role they enjoyed the least out of all the roles they juggle as a business owner.
Think about all the hassle you have to go through to get your money:
Spending long hours, usually late at night, manually entering payments into a spreadsheet—hoping you didn’t miss one or entered an incorrect amount by mistake because it’s late and you’re exhausted.
Bouncing back and forth between the multiple tools you use to store client and payment information.
Running to the bank after a long day and getting stuck waiting in line to deposit cash and checks.
Sending past due reminders to clients who keep “forgetting” to pay.
It’s no wonder so many small business owners dread doing their accounting and bookkeeping.
All these time-consuming tasks add up to an average of one to eight hours a week spent handling problems related to manually creating, sending, and chasing down invoices. That’s time you’ll never get back. Time you could put towards more valuable use on things like getting more clients, closing more sales, or spending time enjoying life outside of work.
As we mentioned, if you’re putting in late hours trying to keep up with paperwork, or even if it’s first thing in the morning after a cup of coffee, there’s always a higher risk for human error when you’re manually entering payments or writing up invoices.
A simple typo when entering in an amount can lead to an upset client—or happy client, depending on who benefits from the typo. According to The Wakfield Research and Concur data, 42 percent of small businesses surveyed have errors in matching their invoices to their clients.
In addition to the questionable accuracy, the poor organization that comes with spreadsheets or multiple tools leads to other human errors like forgetting to send out an invoice or sending the wrong invoice to the wrong client. Unfortunately, when these types of errors occur, you end up hurting your cash flow and your business’ brand. And after you’ve worked so hard to get clients and get paid, it really puts a damper on you and your cash flow.
Security is at risk
There’s a lot of information that has to be securely stored when it comes to billing and payments. Information like client contact information, payment method information (if you accept card payments), and payment history can easily get into the wrong hands when it’s lying around on paper or in a spreadsheet. Plus, as your business grows, keeping information organized in a spreadsheet quickly gets messy and difficult to manage.
Fraud is possible
Using paper processes or accepting paper money (cash and checks) puts your business at risk for fraud and theft. In fact, 75 percent of businesses that accept checks experienced attempted or verified fraud](http://paymentsjournal.com/how-to-cure-ap-pains-with-payment-automation.
While other payment methods like wire transfers, or credit and debit cards also come with some risk, paper checks still rank as the top fraud payment method. Paper invoices are also at risk because they contain confidential client information that can easily get in the hands of fraudsters. Not only does this put your business at risk, but it also puts your clients at risk.
If you’re on the fence about making the switch to the greener side of the pasture— accepting debit and credit card payments or using billing software—because you want to avoid the fees, or don’t want to go through change, you may want to reconsider and evaluate the cost of your time, human errors, and money you could lose to potential fraud.
It’s not as expensive as it seems
Granted, accepting card and digital payments may seem like it costs more in the short run, but in the long run, it’s not as costly as many small business owners may think. The problems and risks associated with manual payment processes and paper money end up costing more than the cost of accepting digital payment and payment processing services.
Cash isn’t going away, and you should still offer it as a payment option if it fits in your business model, but keep in mind the cost of your time. Time you spend counting, sorting, and organizing cash before you can even take it to the bank and then having to wait in line to deposit it. Plus, it can even cut into your client’s time—time they have to take out of their day to run to the ATM so they can get cash to pay you. A study by Tufts University, “The Cost of Cash in the United States,” puts a price tag of about $200 billion a year on the cost of using cash in the U.S. This includes $55 billion in higher costs to businesses, $43 billion for U.S. households, and $101 billion in missed tax revenue because of the off-the-books transactions.
So, the cost of accepting debit and credit card payments isn’t that bad when you take into account the cost of accepting cash. Here’s a breakdown of what you can expect to pay for a card processing system:
Merchant account setup: You’ll need a merchant account so you can collect credit card payments from your clients. The average cost to set up a merchant account ranges from $50 to $200. Some merchant service providers, like Keap Payments, offer transparent pricing with no setup fee and no monthly service fees.
Credit card processing and transaction fees: These usually range between 2-3 percent per transaction, and can go up to 4 percent for international transactions, plus a minimal transaction fee per transaction (Keap Payments charges 2.9 percent plus $0.30 per transaction for U.S. transactions).
Equipment fees: This is for setting up equipment like POS terminals or card readers, but you can easily find special offers or promotions from payment service providers offering free equipment with sign up.
Clients demand convenience
It’s a new world, and more and more people are moving away from cash, checkbooks, and even wallets. They’re only using credit cards, debit cards, digital wallets, and mobile payments and demanding businesses accept payment methods they want to use so they can pay anytime, anywhere. If not, they’ll simply go elsewhere where they can pay with the payment method of their choice.
In a 2016 survey conducted by payment processor TSYS, they asked 1,000 consumers which payment method they prefer. Forty percent chose credit cards, 35 percent chose debit cards, and only 11 percent said they prefer cash. You can bet this has only gotten higher, especially with services like Apple Pay and other mobile payment options readily available to consumers.
Source: TSYS 2016 U.S. Consumer Payment Study
There’s no doubt, it’s tough out there. Not only do you have to compete against other businesses, but increasing client demands are adding more pressure on small business owners. In our 2018 Keap Value Outcome Survey we found out that 70 percent of small businesses think customers are more demanding today than they were in the past. If you don’t already accept credit and debit card payments, you’ll want to reconsider to keep up with increasing demands and competition from businesses like yours who accept card payments.
Clients spend more with a credit card
Demanding clients can be challenging to say the least, but on the bright side, when they can charge a purchase on their card, they usually spend more. Research has shown that 83 percent of customers are willing to spend more when paying with a credit card. Evidence has shown that people tend to do this because they focus more on the benefits than the costs. If you’re still on the fence because of the processing and transaction fees associated with accepting credit and debit card payments, consider the increase in the number of sales and amount per sale. You’ll definitely see a boost in cash flow that’ll make up for the fees you’re paying to accept debit and credit card payments.
You’ll get paid faster
Cash is a quick way to get paid, as long as your clients are carrying it on them. As we’ve mentioned before, people don’t keep cash on hand the way they used to. So while it’s a quick way to get paid, you just won’t find many people still paying that way. Instead, most clients want to pay with a card, online, or a digital payment method. All quick ways to get paid without all the time and effort you have to sacrifice to manage cash payments.
Billing software will improve accuracy and productivity
Many small businesses are using billing software like QuickBooks and Xero (both integrate with Keap) instead of spreadsheets to make it easier for them to manage their bookkeeping and payment process from start to finish. Billing software for small business can be used for sending quotes, creating and sending invoices, collecting payments, and following up on past due invoice.
Benefits of using billing software include:
Get paid faster: Create professional-looking invoices in little time and send them to your clients electronically as soon as you’ve provided your product or service.
Get organized: Store information in the software so you don’t have to deal with managing the paper trail and significantly reduce human error.
Look like a pro: Create professional-looking quotes and invoices and send them electronically.
Gather useful information: Easily run reports filled with insightful information without having to spend time number-crunching or creating formulas in a spreadsheet.
Integrate with other tools: Boost productivity and organization by integrating with other tools you use to run your business like your customer relationship management (CRM) system or payment processing system.
Small business billing software can be your saving grace if you’re at your wits end wearing the bookkeeper/accountant hat. And if you’re tired of all the other hats you wear, we strongly recommend integrating all the tools you use to run your business into one place.
Scott Stroud, Co-Founder of Cash Flow Engineering, Somerset, Kentucky
When it comes to knowing the vital role cash flow plays in small business, Scott is a pro! In fact, he and his business partner left the corporate world a couple of years ago to pursue their passion for helping small businesses streamline their processes to improve and maintain healthy cash flows.
Scott wasn’t always using payment automation to manage and accept client payments. “I quickly learned there are few things I hate in business worse than bookkeeping and accounting. The manual process of managing payments was taking away two days a month out of my life. Sending invoices and waiting to get paid was such a slow process,” he said. As someone who’s passionate about streamlining processes, he knew he had to take action and make a change.
"The manual process of managing payments was taking away two days a month out of my life."
Initially, he tried using a billing software and payment processing service, but that still wasn’t cutting it for Scott. For starters, he didn’t like paying the monthly service fee the payment processor was charging, even on the months he didn’t process card payments. “That was a big burden for us,” he said. He also didn’t like having information in two different places because it was difficult to track and audit payments, see transaction fees, and manage unpaid invoices.
Scott knew there was a better way out there and came across Keap in his search for a solution. He started using Keap to automate and streamline his business processes, including payments.
He quickly got set up and started using Keap (within a few minutes vs. several days). His efficiency skyrocketed.
“I’ve gone from spending two days a month on bookkeeping and accounting to a little over one hour per month,” he said. Keeping track of client payment information is a lot easier now because everything’s in one place and the reporting feature makes it easy to continually monitor cash flow. Also, the time it takes to get paid has dramatically improved. “I’m getting paid much faster. Now, I just send someone an invoice with a link that lets them pay right away,” he added.
Keap has become an integral part of Cash Flow Engineering’s business. They’ve been able to transform their business and payment processes so much that they advise their clients to use it. “Keap is an affordable solution for small businesses. The transaction fee is very reasonable, and there’s no monthly fee,” he said.
When it comes to accepting payments, small businesses have to remain competitive and give their clients convenient payment options. Cash Flow Engineering receives most of its payments via card or online payments, and about 30 percent of their clients pay by check. As a small business owner, Scott tries to keep costs down wherever he can. Keap makes it possible for Cash Flow Engineering to keep the cost down while still offering clients a variety of payment options.
He’s thankful he found Keap and continues to recommend it to his clients. “It makes it very easy and affordable to run my business and accept payments,” he said.
The best way to ditch the chaotic environment of wearing all the hats small business owner typically wear, including the bookkeeper/accountant hat, is to integrate the various software programs and apps you use to run your business into one place. That way, you can store client information, send emails, follow up with leads and clients, send invoices, and process payments all from one place.
At Keap, we refer to the hodgepodge of tools as The Kludge. Bouncing back and forth between tools and keeping information scattered between paper and spreadsheets, makes it hard to stay on top of your game (and maintain your sanity), get more clients, get paid quickly, and ultimately grow your business to its fullest potential.
In today’s fast-paced world with increasingly demanding clients, small businesses are under pressure to stay on top of their game and provide the best possible experience. In our 2018 Keap Value Outcome Survey we found out that 80 percent of customers we talked to expect small businesses to be available around the clock, online and by phone.
Now unless you’ve been blessed with Superman’s powers, there’s no way you can keep up with these trends if you’re still using manual processes. As Superman would say, “Have no fear!” You can be a superhero. Yes, you! By using a tool that allows you to integrate all your tools into one place—yes, even payment processing.
Software tools like Keap seamlessly bring together client information into one place and then use the information along with automation to streamline your customer relationship management (CRM), marketing, sales, billing, and payment processes.
Phew! That’s a lot of stuff for one tool! But, it’s tools like these that can truly bring everything together for you so you can focus on what matters most—providing your clients with an amazing experience.
There are many benefits to using software that brings all the tools you use to run your business into one place. Here are some of the key benefits:
Create order, not chaos:Information is stored in one place, so you don’t have to jump back and forth between tools or enter information more than once. Plus, you never have to try to remember everything in your head because your interaction and activity history with every lead and client is stored in the software tool—and even accessible right on your mobile devices.
Get time back in your day:With all the different types of tasks and workflows you can automate, you’ll suddenly have time back in your day to spend it growing your business, spending time with your friends and family, or taking a yoga class. Do whatever makes you happy.
Get paid faster, and without the stress:After you’ve made the sale, quickly send an invoice with ready-to-use invoice templates, set up recurring payments, auto send reminders on past due invoices. Make it easy for clients to pay you by collecting payments in person, over the phone, or online.
Bring in more business without the legwork:Thanks to marketing automation, when combined with a CRM, you can effectively market to leads and clients with targeted messaging and personalized service based on their behaviors and preferences. An automated sales pipeline will help you stay organized so you can focus on converting and closing sales in less time.
Know what’s working and what’s not working: Get insights into marketing campaigns that are performing well and see which campaigns need some tweaking with insightful reports. Plus, you can run A/B tests on different variations of marketing emails you send to see which one performs best.
As you explore your options for streamlining your business so you can get paid faster and boost your cash flow, look for software that includes payment processing services so your business can flourish and bring out the superhero in you.
No matter how you collect and manage payments, or what type of payment methods you offer your clients, at the end of the day getting paid and having healthy cash flow is the lifeline of any business. The key to getting paid after you’ve provided clients with your product or service is having a robust payment system in place that’s right for your business and offers your clients the convenience they demand when it comes to paying.