4 Reasons Why Contractors Should Accept Online Credit Card Payments
There are two key reasons why many general and specialty contractors still are not offering their customers the ability to pay invoices online with credit cards.
One reason is simply that business owners of contracting companies are extremely busy. It can take some time to get set up with the infrastructure or tools to accept credit cards and they just never get around to it. The other reason is the expense associated with accepting credit card payments. There are services out there today, like Builder Prime, that make it easier and quicker than ever before to start accepting online credit and debit card payments and I am going to tell you why you should, despite the fees.
Customers want it
According to the TSYS 2016 U.S. Consumer Payment Study, 75% of consumers prefer to pay with credit and debit cards. Consumers make payments online for everything from medical bills to pizza delivery. It is a lot easier than writing and mailing a check. Think about the process for paying by check. The customer may first need to make sure the necessary funds are in their account. If not, they may need to wait for a transfer to occur or their next pay check. The next potential problem is whether or not they have run out of postage stamps or envelopes to put it in the mail. On the other hand, people typically have at least one of their credit or debit cards readily available, and they don’t need to worry about available funds or going out to the post office before they can make a payment. They simply log on to their computer or take out their phone and put their credit card info into the form. If you accept credit cards, your customers will like you even more, which is always a good thing for your business.
Get paid faster and more reliably
If you make something easier to do, people are more likely to do it. This is especially true today when people are busier than they’ve ever been before. So, it is no surprise that making it easier for your customers to make a payment results in customers submitting their payments to you more quickly and more reliably. Not only is the payment submission faster when you accept credit cards online, the money goes into your bank account faster too. Credit card payments will be in your account within a day or two of the customer submitting the payment. On the other hand, checks take time to get to you from the customer. Once the check arrives, you also need to take time out of your day to go to the bank and deposit the checks, which may not be on the same day you receive the check. Finally, checks also take time to clear and settle, assuming the check does not bounce. While you are waiting all this time to get paid by check, you’ve already paid your employees’ wages and for the materials to do the job. Getting paid faster and more reliably reduces your cash flow risk and can help you stay in business. According to a survey by WePay, you can reduce cash flow management issues by 15% when accepting all of your payments online.
Time is money. Since you are getting paid faster and more reliably with online credit card payments, that also means that you and your staff will save a lot of time in following up on unpaid invoices. For those unpaid invoices that still need to followed up, sending email reminders can be an effective mechanism. If you send emails to follow up on those unpaid invoices, think about how much more powerful it would be to include a link for the customer to make their payment immediately online rather than wondering if they remembered to mail a check after they finished reading their email.
Reduce paperwork, confusion, and errors
It takes a considerable amount of time and effort to keep track of all of your paper payments. When you receive a check, you need to make a copy of it and file it away. You need to go into the customer’s record and note the payment date and amount. You need to determine if there is any remaining balance and calculate the amount of that balance. All these manual steps increase the odds of errors being made, like under- or overcharging. When you accept online credit payments, you always have an electronic record of the payments automatically. Hopefully you can use a service, like Builder Prime, that will automatically attribute those payments to specific invoices and customer records to make it even simpler and more automated. Online credit card payments will save you time, and time is money.
Harnessing customers’ purchasing power
According to the U.S. Small Business Association, when you allow customers to pay with a credit card, you increase the likelihood of them making an impulse purchase, which can lead to more sales and a higher average amount per sale. It makes sense because you are better harnessing the full purchasing power of the customer and there is less emotion associated with making a purchase with a credit card. In a survey conducted by Intuit, 52% of small business saw their revenue increase by $1,000 per month when they started to accept credit cards, while 18% saw an increase of $20,000 per month! Accepting credit cards can be the difference in winning or losing a job because it removes the barrier of the customer not having enough cash on hand in order to do business with you. The customer may not have all the cash readily available, especially for a big job, but if they utilize their credit, they may be in a better position to enter an agreement with you.
Get happier customers. Save time and money. Increase sales and profits. Those fees don’t seem so high anymore.
Learn more about how Builder Prime helps contractors accept online payments from their customers, and many more money and time saving features designed specifically for contractors.