Payment methods

[canuckclimber]

Hey all,

New member here from the Great White North. I'm happy to have found a site with some useful information.

My question is to the business owners here.

I run a new small operation with a couple of part timers when I need them. Because of the scale of work that I do, I earn enough to live comfortably but not enough to float 'accounts', especially larger amounts. In the past I have been paid by cheque but preferred cash. A few times cheques have bounced and I got tired of it. I started accepting cash only as payment and for the most part there have been no issues from clients.

Last week I had two clients who I bid jobs for say it was ridiculous that I only accept cash. One of them was a bigger job, the other less than $1000.

Keeping in mind I am running this business legitimately, an invoice is always issued, is it really that ridiculous that that's the only form of payment I'll accept?

 

[ATH]

I might get paid in cash 1% of the time...maybe.

Do you tell people ahead of time that is your expectation? If so, I don't know it is too unreasonable...but it is a little abnormal for large sums of money.

If I have a $20 in my wallet, it might last 2 months. If you did a job for me and expected me to pay cash without telling me ahead of time that I needed it, we might experience some awkward silence...

 

[canuckclimber]

I always inform my clients at the time of the quote. I do make exceptions for larger jobs occasionally and return clients with which transactions have gone smoothly in the past. I try to have complete transparency with new client so there aren't any surprises.

 

[stltreedr]

I would think that people would be turned off by the cash only policy... It just lends itself toward illegitimacy.. Like you don't have a checking account or don't want to pay any taxes... even if this isn't true.

Over the years I've never had a bounced check, but couldn't imagine myself running all over town to collect cash payments from people anyway.. The time and travel expense involved in that probably far exceeds the amount of a bounced check once every few years.

If you don't like the checks, take credit cards and raise the price 3-4%.

 

[canuckclimber]

I totally get how some people may think that it's not a legit business by only taking cash. And it I do pay taxes so its not that.

As far as running around collecting payment, I make it clear that payment must be received as soon as services are completed so I don't have to pay phone tag and run about.

I have thought about the credit card option. Just don't know how I feel about 'giving' away possible income.

Appreciate the input

 

[ATH]

Square charges 2.75% with no monthly fee for credit cards. I haven't used it yet because most people pay by check, but I have one in the truck in case somebody really wants to use a card.

 

[canuckclimber]

That's not too bad. May actually be worth doing then

 

[stltreedr]

I use square all the time. It's very easy to use and doesn't cost anything to set up. Money is automatically deposited a couple days later, and you don't have to go to the bank.

 

[crotchclimber]

If customers want to pay by credit card we use Paypal. We don't currently charge the extra 3% we lose by using it but think about beginning to charge 3% extra for cards. There is a small cash discount; not sure why since I don't run the business side of the company, but I'm assuming it goes towards the quarterly bonuses.

 

[ChoppyChoppy]

Mostly paid in cash. I'd guess 85% cash, 10% checks, 5% credit card.

 

[ATH]

If customers want to pay by credit card we use Paypal. We don't currently charge the extra 3% we lose by using it but think about beginning to charge 3% extra for cards. There is a small cash discount; not sure why since I don't run the business side of the company, but I'm assuming it goes towards the quarterly bonuses.

Isn't a "cash discount" tantamount to charging extra for a card?

I really prefer checks as they can be deposited on site or when I get back home from my phone. Gotta stop at the bank to deposit cash. No fun with a truck/trailer as bank parking lots tend not to be set up for that.

 

[crotchclimber]

Isn't a "cash discount" tantamount to charging extra for a card?

I really prefer checks as they can be deposited on site or when I get back home from my phone. Gotta stop at the bank to deposit cash. No fun with a truck/trailer as bank parking lots tend not to be set up for that.

No, cash means cash, not checks. Check and paypal are the same price.

 

[ATH]

OK...most places that offer a cash discount include checks.

I guess that cash cash discount avoids the bounced check concern. many who insist on cash are doing so because that is harder for the tax man to find. (OP acknowledged that is not the case for him...).

 

[canuckclimber]

Appreciate all the input guys. Stltreedr, I looked into the square credit card option and have one on order. I don't know if I'll use it right away but it's an option now.

 

[troutbum]

The square is nice, i used it while i was guiding fishing trips. There's even a gratuity option!

We take cash or check for tree work and firewood. People show up all the time looking to get firewood with plastic and have to go to atm. Trying to get the owners to take square and add on the processing fee to avoid those awkard assumptions

 

[blades]

Problem with SQ- lot of hacking going on and pilshing. Last 3 weeks its been a running battle - I did inquire at Sq central ( i do not have an account with them) And that was what I was told. I only take Visa and MC plastic, checks and cash. If you do not want to do checks then Money order or perhaps bank draft. I only accept local checks unless it is a large corporate co. I have been burned a few times over the past 25 years by corporations that went belly up and a couple of those were pretty hefty amounts $xxxx.xx. For me those are double whammies as I am on the hook for the materials in addition to not making any profit. Heck ya can get burned on the plastic just as well if they file some sort of complaint. There have been money order and bank draft scams around as well. And there have been tales of being stiffed on the cash side on this sight in the past. So nothing is 100%, One of the reasons you should have at least a 3 month cushion stashed away. Small claims court is a bit of a joke- ya can get a judgement- good luck trying to collect as that is still up to you not to mention the time and money spent on it.

 

[ChoppyChoppy]

Had one check bounced, actually not too long ago. My freaking bank charge ME a $30 fee!
I thought that was crap, I didn't have any way to know!

In the end the customer came back and paid with cash, plus the $30 fee. Pretty much he wrote a few checks his wife didn't know about so the account was thin.

 

[blades]

You were lucky some of the money changers are charging $75 per/ and ya better hope that by the time they inform you, that your account has enough to cover that deduction otherwise they start nailing you for your own ISF checks. They can clear a check in 24 hours but it takes 1-2 weeks before you are informed- somethin fishy there.

One way to avoid , although it's a bit of a hassel is to immediately take the check to a branch that is drawn on and get it cashed- almost always a charge for this also , and they do not like to do that. You can check that there is enough funds by phone before you go, and if there is there get your tail in gear as there might not be in a few hours.

This also works with returned for ISF checks from customers- learned long ago that just running through the system again doesn't work.

Credit card disputes are another ballgame and are a royal pia.