On Business / 29 Apr 2015
Boost your cash flow

At last, direct Debits and Credit Cards for Small Businesses

We have just received our first credit card payment and I’m afraid I’m childishly excited. I know we may be a little late to the party but good things are happening for small businesses when it comes to getting paid and I thought those of you who are not yet ‘at the party’ I thought you should know.
I have been striving away at the small business coal face now for almost 25 years. From time to time I have made approaches to my bank about taking credit cards and direct debits. Customers want to paid this way and I was only too pleased to be able let them. But the bank said ‘No’. Well not exactly ‘No’ but they placed the bar so high that it was an impossible leap. Direct Debits, in particular, were outside my scope and the scope of so many other small businesses – farbeit for the bank to make it easy for you to collect what was due. Cash IS king but, on this matter, the banks were tyrants.
Some years ago I would have demanded to carted off to the funny farm for saying this but hallelujah Paypal! No forms to fill in, no signatures required from both sets of grand-parents, no personal guarantees to sign, no turn over limits – just a few simple clicks on your Paypal business account. Combining this with my cloud based accounts package (the hilariously named Xero) I now have a link at the bottom of my invoices which takes you to payment screen and Lo! people actually use it. No more ‘cheque’s in the post‘, ‘You’ll get paid when I get paid‘, ‘Can I have a POD /copy invoice?‘ or assorted other delaying tactics, just money in your bank.
There is, of course, no such thing as a free lunch and all the credit card caveats still apply. I’m lucky as we are only charging for time (by and large) so a credit card payment going south is annoying but not a disaster. No business should ever forget that payer has all the rights – the slightest complaint to the issuing bank and it’s up to you to prove that the transaction was genuine in all its parts. But this aside, if you don’t have a Paypal link on your invoice you might want to seriously think about it.
Then there is the inestimable Go Cardless. Previously, if as a small business with less than a certain (very high) amount of direct debits this great boost to cash flow was beyond your reach. And then, even if you did have a the right amount of DD customers setting one up was a painful and lengthy process. Go Cardless have swept all this away. You just sign up for an account and then start adding customers. A message is sent to your customer asking for authority. Once received you start taking the money – that’s it. I have nearly 100 recurring payments from customers which previously had to be individually invoiced and chased – inevitably some fell through the gaps. This is a thing of the past and, furthermore, I can now split payments over 12 months which makes life easier for some customers and has definitely won me more business.
If you spend any amount of time and/or money chasing debtors then these two are the proverbial no brainer. Of course there are factors to be taken into account and I accept that neither may work for all businesses, but it works for mine and I strongly urge you to consider them.
(In the interests of fairness – other products are available)

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