Accepting Payments as a Small Business

Depending on what your business supplies, and how you operate it, can inform your customers’ expectations of how to pay. A stallholder might only accept cash, an online seller could rely on PayPal, and a freelance copywriter might send an invoice so clients can make a bank transfer. These are just examples, and there are probably all sorts of combinations and alternatives.

Here a few things to remember when handling payments, whichever method you choose.

Asking for payment

Whether online or in-person, requesting payment in a shop environment tends to be quite straightforward. The customer already understands the tangible or digital product that they’re buying and what it costs. To access it, they’ll have to pay at the checkout, or enter into a payment contract.

When supplying services, such as accountancy or painting & decorating, customers might not be sure if they should pay upfront, at the end of the project, or at intervals all the way through. Supply a quote to your client and confirm when and how payment must be made. It could mean setting up a direct debit agreement, or issuing invoices with your bank and PayPal details listed.

Making a record

No, not your debut album (unless that’s the business that you’re in), a record of the sale. We’re all about keeping records and good bookkeeping, so be sure you keep track of your payment requests. It makes it easier to monitor and chase late payments, and reconcile money that comes in.

Sometimes payment happens instantly, like if you’re running a small newsagents and the cash register logs sale and payment together. It’s still important to keep track of the sales made; for record keeping and for business forecasting.

Confirm that payment has been received

Confirmation of payment can take many forms. A till receipt in a shop, a handwritten note, an email, a copy of the original invoice with a paid stamp on it… Show the amount received, date received and, where possible, what it was for. A unique reference number (or quoting the original invoice number) is also useful.

Whether or not they request it, giving your customers a receipt acts as further proof of purchase for them, and is a polite way to acknowledge a transaction has taken place. If you run an online shop you can usually set this up to happen automatically.

Update your records!

If payment isn’t instant, then it’s important to review all of your sales data to see what needs following up on. The customer might have forgotten, or there could be a complaint to be addressed.

Once payment is in, update your figures!