Financial Perspectives

Many places tend to treat repeat customers specially through offering discounts, extra services, or whatever.

However, they remain customers and one of the key things about that is that you need to get money off them for whatever goods or services that you sell, even if they are both a repeat customer and a large one.

One trap to fall into is to be more lax with the payment terms. Unless you habitually offer credit then you shouldn’t offer it to even the best of customers as sooner or later it’ll just cause needless friction between you and a good customer. If it’s pay on delivery for everyone else then that should be the case for even the best customers too as your sales contract probably doesn’t allow for any credit in such circumstances: a recipe for trouble collecting the cash if ever there was one.

So, yes, offer better discounts to better customers. Yes, offer, additional services to better customers. But, NO, don’t change your payment terms.

One of the first shocks that you get when you start your own business is the extra cost of business accounts. Whilst the list of charges for personal accounts is usually fairly short, there seem to be untold numbers of things that banks feel the need to charge you for as a business.

Now, you would sort-of expect that they would charge you if you’re depositing large amounts of cash in that there’s obviously work involved in handling it. You probably also know that they charge a percentage of your credit card sales too and that there’d be a charge for the credit card terminal too. But setting up the terminal? Providing the software for it? Surely not?

Well, if you plan on taking everything from your own bank, yes, you probably will be charged for setting up the terminal and you probably will be charged for the software required to run the thing too (anything up to $500). Not only that, but try accepting card payments online and you’re potentially talking another $500 for the software that you’ll need to accept those payments too.

That’s just for the standard Mastercard and Visa acceptances too. Add American Express or anything else and you add to your costs yet again. Even commonly used things such as the ability to process customer not present transactions is generally seen as another opportunity to charge you.

What the bank won’t be too upfront about telling you is that you can get a merchant account from a separate organization. There are increasing numbers of these outfits around and the market competition is driving prices down with the likes of First Data providing free setup, free point of sale software and 24/7 service (something that, quite surprisingly, isn’t always provided by the banks) and things that you might expect to be standard but usually are billable such as reprogramming of the terminal.