Part 3 of the Series: Going Electronic with Business Payments.
Throughout our ‘Going Electronic with Business Payments Series’, I have been highlighting potential hurdles or aspects of electronic payments functionality that you will want to consider before switching from cheques to an electronic payment solution.
To round out the discussion, I want to share with our readership a few more things to consider before you make the move to electronic:
Payments to large suppliers, Telco’s, utilities, credit cards: With bank electronic funds transfer (EFT) solutions, you will not be able to pay any of the large regular monthly billers. There is a simple reason for this: none of them will give you their bank account information. If they did (and in the past some have tried, only to quickly reverse course), they would have hundreds or thousands of businesses making deposits into their bank account each day. Can you imagine receiving hundreds of emails each day and try reconciling those payments?
Note: Telpay’s system allows businesses to pay large utilities because we already have their bank account information.
Part 2 of the Series: Going Electronic with Business Payments.
Many times when business owners or accounting professionals think about “going electronic,” they default to their personal online banking experience – paying bills through their financial institution’s online bill payment service. Most are surprised to learn that the limited bill payment service at their financial institution falls short of a complete electronic system for sending and receiving payments.
Since online banking services at the various financial institutions were designed for the personal payment experience, it shouldn’t come as much of a surprise that these services have yet to meet the requirements for business payments.
Online banking services offer two options for sending and receiving payments. These options can work for some businesses, but both have their limitations, which I will review below.
A three part series on “going electronic” with your business payments.
Switching from cheques to electronic payments for most businesses is definitely the way to go. In order for accounting professional to help prospects and clients find the right payment solution, it is important to understand how other electronic payments work in comparison to Telpay.
Over the next three articles, I will reveal many key points of going electronic that I encourage you to share in your sales presentations. In my last article, I will compile everything together to create a checklist, that you can reference to help transition your clients to electronic payments.
Before I begin, let’s clarify: What does it mean to go electronic? I am referring to the solutions that are designed to replace regular cheque or credit card business payments.
Most often, people think of the following payment options:
– Online banking
– Bank electronic funds transfer (EFT)
– Third party electronic payment solutions: Telpay, PayPal, etc.
To keep it simple, I am going to keep the conversation between Telpay and bank solutions. There are other options (i.e PayPal) but most do not work without costly credit cards. Many businesses are encouraging their customers to pay by EFT, to save on the rising costs of credit cards, which is why Telpay is becoming important in the Canadian payments landscape.
Are you sometimes challenged with determining how much to charge for your accounting services? The way that you perceive your value may affect how prospects will engage with your business. An important part of building a strong bookkeeping business is to properly value yourself and your business. You also need to be able to convey that value to clients – to ensure they appreciate the value you bring to their business.
The best accounting advisors know their value. They don’t under value their services and they are willing to lose out on a potential client if that prospect isn’t willing to pay for those services. They regularly cull their client base to remove unhealthy clients.
How do you come to value your services and gain the confidence to take your business to that next level? I’ve had the pleasure of working with many bright and talented accounting advisors. I’ve been able to observe what the ‘greats’ are doing and I often try to share their experiences when I speak with accounting advisors.
One thing I’ve noticed a lot over the years is how challenging it can be for accounting advisors (accountants and bookkeepers) to convince their clients to move to a new product or system. With Telpay, the conversation with the client generally involves switching from cheques to electronic payments (direct deposits). Every accountant and/or bookkeeper has experienced rejection from a client when they’ve tried to pitch them a new solution; even when it seemed like a ‘no brainer’.
We all know change is difficult but in business, change is essential. For your accounting business to prosper you are going to be continuously reviewing processes and technologies. Introducing new solutions to clients can be tricky, and for some, uncomfortable. Selling solutions to clients is a necessary part of the business.
To increase your chances of success here are a few tips shared by accounting professionals:
Your role is the ‘Trusted Advisor’. As a trusted advisor, any products or solutions you recommend should carry with it at least a modicum of weight. Business owners want to work with advisors they can trust, it’s built into your role. Therefore, have the confidence going into the conversation that beyond anything else, your opinion will matter. If you find that your opinion doesn’t matter, it’s time to reassess the business relationship.
Everyone likes getting paid. When your business uses electronic systems to send money directly into bank accounts, it says a lot.
I once had a client tell me; ‘When I send money electronically, it makes my business look more professional, as if we are bigger than we are.’
As some of you may know, Telpay’s system gives businesses the ability to send money anywhere, with just a few clicks of the mouse. That’s very powerful.
Understanding how paying electronically impacts the receiving party is important. Here’s a look at how the people and businesses you pay feel about getting paid by direct deposit to their bank accounts.
Why do I love my direct deposit service? Let me count the ways. It is for the same reasons that I love paying personal bills with online banking – it’s easy, ultra-convenient and recipients love it!
Reason #1 – It’s Easy
Businesses should always be thinking of ways to become more efficient. Sending money with a few clicks of the mouse is certainly more efficient than dealing with the manual cheque processes – buying cheques, printing, signing, assembling – this is no longer the best way to pay employees or suppliers. Continue reading
On March 31, 2014, businesses sending cheques will see their costs for stamps increase by between 19-35%. The price of stamps and cheque related fees are constantly increasing, so the announcement of a price increase did not come as a surprise. What was surprising was the dramatic increase of stamps – as much as $1.00 when purchasing a single stamp.
The good news is that for businesses already sending electronic payments there will be no cost impact on their business. On the other hand businesses using regular mail will see a dramatic cost increase.