You are leaving wellsfargo.com and entering a website that Wells Fargo does not control. Wells Fargo has provided this link for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of this website.
When it comes to business operations, how you choose to make or accept payments may be critical to your cash flow. Inefficient payment methods not only keep your business from growing, but can also cost you money.
Here are four ways to help improve your payments.
1. Accepting payments: Switch from cash to plastic
"While the fastest method of collecting payment is cold hard cash, the problem with collecting cash in bulk is that it is costly for banks to process, so fees could add up," says Gabriel Sofaer, business banking manager at Wells Fargo.
In addition to possible fees, restricting the way you receive payments could prevent your business from attracting new customers. According to recent studies, more than 75% of consumers prefer to pay with a card. In the U.S. alone credit card purchasing exceeds $3 trillion.
2. Accepting payments: Go digital
Consumers' inclination to use digital payments over traditional methods is on the rise.
"This means that small business owners have to be prepared to accept multiple payment types, be more tech savvy, and be able to understand how their customers want to pay," says Tracey Fanelli, senior vice president of marketing, merchant services at Wells Fargo.
One digital form of payment on the rise is contactless payment. Chip-based technology allows consumers to wave or tap their credit card, debit card, smartphone or other wearable tech to complete transactions. Research predicts that the ease of this form of payment will lead consumers to use contactless instead of cash for small purchases like snacks and drinks.
For many businesses, making payments omnichannel may be the best way to make going digital work for them. "E-commerce has become widespread, and as part of that, businesses need to become flexible by offering customers a variety of ways to pay and accepting new emerging forms of payment for their convenience," adds Robert Ash, treasury management sales manager at Wells Fargo. "Business owners can use a provider like Wells Fargo as a gateway to access products and services so their customers can go online and be able to conduct business with them digitally."
As your business grows, your needs will change, and there are point-of-sale systems such as Clover® that come equipped with tools to help you manage your business – along with accepting multiple types of payments such as credit cards, debit cards, gift cards, and digital payments such as Apple Pay®. These tools can help you with cash flow by giving you insights into your customers' purchasing habits, how your goods and services are performing, and with marketing and customer loyalty apps, you can drive traffic and purchases to help support consistent cash flow.
"These systems enable business owners to improve their business with detailed and robust reporting," says Ash. "From how to grow your customers to creating a customer loyalty program, good reporting helps you see the big picture."
The robust reporting capabilities of the right POS system may lead to better business decisions affecting cash flow. For example, a business owner who is considering extending operating hours may be able to look over reports from their POS system to see when their busiest or slowest times occur. From there, the business owner may choose to close early on some days and extend operating hours on other days to help increase cash flow.
4. Making payments: Skip the check for a better bottom line
Checks can be inconvenient for your cash flow management: you'll need to account for that check's payment until the check is processed, despite the sum still appearing in your account. Failing to do so can lead to disruptions in your cash flow. From start to finish, it could take weeks for a check to clear.
With paper checks, you'll also face the risk of potential payment loss, or a bank hold, says Sofaer.
For these reasons, Sofaer says, "Doing business electronically is the most effective way to manage cash flow on both sides." However, it's important to only consider electronic options that are safe for your business, such as ACH payments, electronic wire transfers, and Wells Fargo Direct Pay.
As you explore your payment processing options and additional available resources, consider how each may impact your cash flow to choose the option that makes the most sense for your business's current standing.
Resources for Small Business
Use this interactive tool to develop your business plan today.
Clover devices require a Clover software plan for an additional monthly fee per device. Clover charges a fee for this software and you will be billed directly from Clover. This fee is subject to change and applies to all devices except Clover Go. Availability of certain software plans, applications or functionality may vary based on your selected Clover equipment, software or industry.
Wells Fargo Merchant Services and Wells Fargo Bank, N.A. do not provide and are not responsible for third party software or applications, including those offered by Clover. Clover software, applications and other third party applications that may be available through Clover or in the App Market are subject to the terms and conditions of the developer and may include additional fees subject to change at any time. Those software and App Market application fees are disclosed in the Clover App Market or your Clover dashboard and are in addition to the Wells Fargo Merchant Services fees listed within your Agreement.
Apple, the Apple logo, Apple Pay, Apple Watch, Face ID, iPad, iPad Pro, iPhone, iTunes, Mac, Safari, and Touch ID are trademarks of Apple Inc., registered in the U.S. and other countries. Apple Wallet is a trademark of Apple Inc. App Store is a service mark of Apple Inc.
The Clover® name and logo are trademarks owned by Clover Network, Inc., an affiliate of First Data Merchant Services LLC, and registered or used in the U.S. and many foreign countries.
Information and views provided are general in nature and are not legal, tax, or investment advice. Wells Fargo makes no warranties as to accuracy or completeness of information, including but not limited to information provided by third parties; does not endorse any non-Wells Fargo companies, products, or services described here; and takes no liability for your use of this information. Information and suggestions regarding business risk management and safeguards do not necessarily represent Wells Fargo’s business practices or experience. Please contact your own legal, tax, or financial advisors regarding your specific business needs before taking any action based upon this information.