Many business owners and managers spend a lot of time analyzing ways they can cut costs when it comes to things like advertising, staffing, inventory, and production since this can be a quick way to free up cash flow and increase profit.
However, don’t forget that there are typically plenty of other areas where you can save time and money in smaller doses; cuts which add up significantly over months and years.
Your business finances are one particular department worth considering more closely if you want to save some money. Read on for some simple yet effective ways that you can go about cutting costs when it comes to your accounts today.
Save Money With Direct Checks
Most businesses end up paying more to accept payments from their customers than they would like. If for example, you allow clients to pay for goods and services with checks, you may find yourself having to catch up with late payments regularly.
This gets costly when you factor in the amount of time you or your team have to spend on the task, as well as the impact this can have on cash flow. If you have to hire a collections agency to chase up funds, or a solicitor to take action if things get really bad, you can be out of pocket a whole lot more. To stop this from happening, consider setting up a direct check system instead.
Direct checks make it quick and easy to take checks over the phone, rather than having to wait for customers to mail them to you or worrying about checks bouncing when you bank them. With this method of payment, you can avoid transaction fees and get paid instantly. You simply receive verbal consent from your client over the phone to produce a paper demand draft check.
Once this has been done, you enter and then verify the data provided by your customer, print a deposit ready paper check in your office, sign it, and deposit it at your bank straight away.
Find a Cheaper Merchant Services Provider
When it comes to taking payments, it’s also worthwhile shopping around for the best-value merchant services account for your needs too. While you may think that the merchant fees charged by payment processing firms are just a small amount overall, they really can add up over time. Whether you’re just about to start trading online or have been using a merchant services company for a while, it’s important to review your current costs and make sure you take advantage of the lowest rate.
Related Article: 5 Surprisingly Cheap Forms of Small Business Financing
You may find that your sales volumes have increased since you first signed up to a provider and that you can now enjoy a reduced merchant fee per transaction; or that a merchant services firm are offering a great deal for new customers that will save you set-up fees or other costs. It always pays to do your research and, in addition, to ask providers if they can give you a better deal than what is currently being advertised.
Conduct Comparisons on Accounts and Cards
Make sure that you also conduct comparisons across all of your business accounts. For starters, the monthly fees you are paying on your transaction account can be an unnecessary drain on finances. You can often get rid of them though with one call or a little bit of research. Speak to your current bank to see if they will waive the monthly fee. If not, consider moving your account to a different institution. Plenty of organizations offer free or lower-cost accounts, particularly for new clients.
If you have a business loan in place, it’s also important to regularly review the interest rate that you’re paying on it. Apart from the fact that you may find another lender who is offering a cheaper rate you can switch to, you might also discover that you’re eligible for a reduced rate because of recent business performance.
When banks and other institutions set their interest rates for loans, they typically do so based on the current industry base rate plus the applicant’s risk margin. If you have paid down the debt owed by your business recently; increased your company’s sales volumes or profitability; or put better management processes in place, your overall risk factor may have reduced. In turn, this could mean that you can receive a better rate. You should, therefore, ask your current lender (and potential alternative ones) to review your case on a regular basis.
Related Article: Money Matters: Financial Literacy for Small Businesses
In addition, don’t forget to keep an eye on the credit cards rates and fees your business is paying, particularly if you tend to have unpaid balances at the end of each month. You should shop around for a credit card with a lower interest rate so that you don’t rack up so much interest each year. Also, look for a card which doesn’t charge any annual fee, or that at least has a lower one.