Today's Technology for Tomorrow's Firm.
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SUCCESSFUL SMALL BUSINESS CONSULTING NO MATTER WHICH MERCHANT SOLUTION YOU DECIDE TO GO WITH, ADDING CREDIT CARD PAYMENT OPTIONS FOR YOUR CUSTOMERS SHOULD RESULT IN A DRAMATIC INCREASE IN CUSTOMER SATISFACTION, REDUCED ACCOUNTS RECEIVABLE BALANCES AND INCREASED REVENUES. How to Obtain a Merchant Account T ere are several options for obtaining a merchant account. T e best place to start is to talk with your bank because you will probably get the best discount rate (a fee you pay for each transaction, varying from 2 percent-4 percent or so) by working directly with the bank who knows your business account history. Assuming that's an impressive story, your bank will probably bend over backwards to help you obtain a merchant account. However, if that doesn't work, you should contact one of the many merchant processors or gateway companies that I've listed below. Or, you can search the Internet for Merchant Gateways and you'll fi nd several options. Note that you'll be asked for several items to qualify for an account. You'll need to provide your expected average credit card sale amount, the total expected revenue from credit card sales, and information about whether you'll directly swipe cards (card present transactions), or if you'll be accepting credit cards over the phone or on your Web site (card not present transac- tions). T is information is used to determine the "risk" for your account, and in turn it determines the rates and fees you'll be required to pay for credit card transactions. Once you're set up, you should be able to start accepting credit cards within a week or so from your applica- tion date. If your business is unable to qualify for a merchant account, or if you just don't want to, there are still several ways of accepting credit cards without a merchant account. T e fees are higher, but if only a small number of sales are by credit card, you might not really need to set up your own merchant account. In that case, there are several options including Google Checkout (www.google.com), PayPal (www. paypal.com), or Square (www.squareup. com). Handling Credit Card Transactions in the Accounting System In my January 2012 column (www. CPAPracticeAdvisor.com/10452665), I introduced the concept of "Lego Mastery." T e process of integrating eCommerce shopping carts and merchant accounts into the accounting system is a perfect example of why accountants and consultants need to develop Lego mas- tery skills that prepare us to identify the right pieces of the ("chunkifi ed") business processes and connect them together to make a cohesive, efficient system for the business. Dealing with credit card payments from customers requires additional setup, workflows, and reconciliation steps for the bookkeeper. Depending on which merchant account you select, you'll add diff erent steps to the bookkeeping work fl ow. For example, if you use QuickBooks, and you use the Intuit Merchant Service for QuickBooks, you'll experience a fairly streamlined process for the bookkeeper that is well-integrated from the Sales Receipts or Payment transactions all the way through to the bank deposits and bank reconciliation. However, if you have a Web Store shopping cart that is not compatible with Intuit's gateway, you may have separate workfl ows for phone orders and Web store orders. Similarly, if you use Sage 50 (for- merly Peachtree) and Sage Payment Solutions, you'll experience streamlined processing of credit cards and deposits in Sage 50. And of course, integrating non-Sage Payment gateways may also present workfl ow challenges for the bookkeeper. T e issue of separate workfl ows for phone vs. Web store orders, and the use of gateways not directly integrated with the accounting soſt ware could cause a signifi cant challenge for your staff , so by all means, look deeply at this issue before selecting your Web Store shopping cart solution and your payment gateway. No mat er which merchant solution you decide to go with, adding credit card payment options for your cus- tomers should result in a dramatic increase in customer satisfaction, reduced accounts receivable balances and increased revenues. Even if you don't get your own merchant account, it's worth fi nding the right solution that makes it possible for customers to pay you by credit card. If you're concerned about the costs of a merchant account, note that it is a very competitive marketplace so check out the merchant account providers' websites. Each business has diff erent needs and by researching carefully, you should be able to fi nd a great solution at a reasonable cost. Here is a short list of Payment Gateways and Merchant Processors to help you begin your research: CCBill (www.ccbill.com) CCNow (www.ccnow.com) Google Checkout (http://checkout. google.com) Intuit Payment Solutions (http://payments.intuit.com) Kagi (www.kagi.com) PayPal (www.paypal.com) ProPay (www.propay.com) RegNow (www.regnow.com) Sage Payment Solutions (www.sagepayments.com) April 2012 • www.CPAPracticeAdvisor.com 29