Choosing the right payment method
Checks vs. Cash vs. Credit Cards vs. Online Payments
There are only four ways to receive payments for the lessons or classes you teach: cash, check, card, or online. At the end of the day, we as freelance instructors are just trying to get paid on time without all of the extra headaches. As business owners, we have to find billing methods that not only work for us, but also our clients.
While you might be able to get by with only accepting cash or checks, please realize some of the limits or hurdles you may have to face… such as trusting a 13-year-old with $60 check every month or worse — cash, being carried around in their backpack… GASP!
I think we can all agree that getting paid is much more important than how we get paid. That’s why I think it’s vital to accept any form of payment method that your client may give. In fact, you increase your chances of getting paid by offering different forms of payment methods. At the end of the day, you’re offering a service and that service includes how you bill your clients.
Before diving into each method, let’s focus on three key rules when conducting any form of billing method:
Keep it simple
By keeping these three points at the forefront of your mind, I guarantee that more the majority of your clients will pay you in full and on time. Now, let’s take a look each method.
Cash is just about every business owner’s favorite sight to see. It’s as ‘pure’ as gold, not having to face any processing or transaction fees. But let’s be realistic, who is still carrying around cash? Fewer Americans are using cash than ever. While cash might feel better in your hands, note the additional downsides, like not being able to track these payments or having to make special trip to deposit in your bank.
Second to cash, checks also avoid most processing fees, in addition to being easier to track and deposit. With the rise in banking technology, you can simply use your phone to deposit written checks. Plus most deposits are processed the following business day or two. Getting paid by check is probably the most efficient and economic friendly than any other method, just as long as the student doesn't lose it between home and school! Here’s a list of five reasons put together by BankRate.com of why paper checks won't die.
Accepting Credit/Debit Cards
Today, using a credit or debit card is the most common way people make their payments. It’s convenient, flexible, and more secure for businesses and consumers. Take it from experience, consumers are more likely to carry around their debit or credit card than cash or paper checks, especially with bigger purchases.
While accepting card payments offers simplicity, there is a cost. You may be subject to pay processing and transaction fees, as well as purchasing hardware to process those payments. POS, or point-of-sales, services include PayPal Here, or Square.
Offering online payments could not only help you get paid faster, but could also save you a bit a time, and possibly some money! However, there are a few factors you should consider before diving in.
Fees- how much are the transaction and processing fees?
Security- is it safe for my clients and me?
Features/Services- does it offer recurring payments, invoices, or other services that may better serve my business?
Accessibility- is it easy to use and access from my client’s end
API (for development purposes)- does it work alongside apps that I’m using (see OMNIS online payments)
Online payments are usually quite simple to get started with and offer the most flexibility for clients. While the transition fees may get a (small) percentage into your sales, think about the convenience and time it’s going to save you. Not only that, but these service fees are also tax deductible. Before implementing online payments, be sure to do some research!
While this article is meant to better serve you, I recommend choosing a billing solution that first meets the needs of your clients. I don’t think you can go wrong by offering all four, giving your clients the options. Face it, at this point you’re just trying to get paid.
Now not every method will work for every business. For example, a bassoon instructor in a school system might not have any reason to offer credit card payment machine if their students don’t carry around a credit/debit card. Again, just find something that ultimately is simple to use, saves you time, and offers flexibility. You and your clients will both appreciate it!