Recently, more and more companies have decided to enact a service fee program. This led to customers choosing to pay by check. While this has reduced credit card processing fees, it has increased past due balances. Now it is time to resolve outstanding accounts receivables.
We are hearing from clients who implemented payment processing options that put the burden of the processing fee on the customer. While merchant services is an expense, it is nominal compared to carrying unpaid invoices. If you are unable to collect fees after work has been completed, credit cards can be a solution.
What’s important to consider is the true cost of an outstanding debt, and that successful collection of payment is possible.
Waive the Fee One Time
Allow customers to use a credit card to catch up on any unpaid balances and clear your A/R.
Offer a convenient payment “today” via credit card and eliminate the service fee for this one-time payment. The nominal 2.5% to 3% in processing fees will greatly reduce carrying costs, bringing in revenues that may be past due from earlier this year. As year end draws closer, it is time to collect and accept final payments.
Set Up A Recurring Payment Plan
Break up larger balances and offer a recurring plan, reducing the monthly (or even every two-week) payments into a manageable budget.
Late payment by clients is more and more common, regardless of whether you are a trade contractor or professional service company. If your business is in one of these fields, you are not alone.
You understand at this point that they can’t afford the full payment at once. So, create a mutually agreed to payment plan. Break the balance into small, easily manageable payments for resolution.
All Industry Solutions
The options outlined here often work well for all service-based business.
Recently, we have worked with CPA firms who completed their client’s extensions on tax returns, contractors who have competed home repairs, a professional consultant providing fractional advisory services, and many other business owners – like you – who have had issues. Their debate was:
- Wait for the check payment promised?
- Collect funds via credit card and waive the fee one time?
Payment Options for Business Owners
If you have heard complaints that a customer didn’t want to pay the service fee associated with a credit card, you can adjust the invoice. If they have not yet made their payment by check, solve the problem. Take the fee off for this one-time payment via credit card.
Or, consider other digital options such as a debit or bank transfer (EFT) which can be resolved while you are on the phone. Share the payment link via a secure text, to the payment portal. We recommend you send the payment request while on the line to ensure prompt follow through and execution of the payment.
Ask TransAct For Help
Remember, we are ready to connect with you and will review your business needs. We advise clients on options, share expertise and help evaluate the best payment solutions. It is time to bring in outstanding accounts receivables and the revenues you have earned. Then, you can focus on the future, long term goals for the coming year.