Payment methods have changed a lot over the years. Now many different services allow you to invoice your clients quickly and electronically, meaning you no longer have to wait for a physical check to come in the mail. If you're considering using an electronic payment method or you’re just starting your business, here are a few things to consider when setting up payment processes.

First, how long is your timeframe for payment? Net 15? Net 30? Some other terms that you may have adopted from a past business or job? Cash flow is the lifeblood of your business. In our modern world, it’s not necessary to base our payment terms on old business assumptions. Most people and organizations now pay invoices as they’re received. So as you’re setting up or adjusting your payment terms, ask yourself this question: why do you want to wait for your money?

Second – and this one is critical – have you set up precautions so that you can take electronic payments safely? Establishing a financial firewall is a great place to start. How do you do that? Set up a merchant account for your business. A merchant account is the account number that will have the most exposure to the outside world, and this is where you’ll receive electronic payments.

Once the money is in your merchant account, you can transfer it to your business checking or savings account. This manual gap helps to provide safety from someone hacking your checking account. If anyone were to hack your merchant account, they would only have access to whatever money is left in there, and you would have a solid barrier to protect your business checking account.

Do you need help setting up good processes for your business? Contact us to set up a time to talk.

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