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29
May
2014

Are credit cards worth the cost?

The answer depends on your clients

Do accepting credit cards make sense for your firm? Here are some things to think about:

For many business owners, their intial reservation about accepting credit cards is the fees that they would have to pay to the merchant card provider. Fees vary greatly and the merchant card industry is notoriously convuluted and full of hidden feels, so you have to shop around carefully for the best deal. The good news is that in one or two hours surfing the net you will get you the information you need. We recently changed our merchant card provider and were pleased at how affordable they were compared to our previous provider.

Yes it can feel painful at times to pay the merchant fees, but this should be weighted against the cost of collecting from

clients who are slow to pay, the reduced bookkeeping expense/labor and that by accepting credit cards you are providing a higher level of customer service. 

Is charging the client's credit card really providing better service?

Traditional Method -

You create an invoice. You print it or email it to the client. The client has to open it and remember to pay it. At some point, the client has to write out a check. The client has to put the check in an envelop, address it and put a stamp on it. The client then has to mail the payment. You receive the check, look up the invoice in the system, enter the payment, create a deposit slip, drop the deposit off at a bank.

Optional Method -

You create an invoice, but it states that you will charge their credit card in five days if you don't hear back from the client. You print it or email it to the client. The client has to open it. If they don't have an issue with the bililng, then they have nothing more to do. If they have a question about the invoice, they know they have to call you and discuss it quickly. Five days later,  all you have to do is to click on the "Charge Client's Credit Card On File" button(fortunately DesignSmart will remind you to do this!)

 Bottom line: By accepting credit cards you are doing a service for the client.

  • Tags: clients

Categories: Best Practices

Comments (1)

  • financethinkers

    27 July 2014 at 10:39 |
    I am very enjoyed for this blog. I feel strongly about it and love learning more on this topic. If possible, as you gain expertise, would you mind updating your blog with more information? It is extremely helpful for me.