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Payment reminder letter to client for small businesses

using the free no fee personal version of venmo paypal or the cash app is a big no-no when it comes to collecting payments from customers in your small business and i'm here to tell you why hi there i'm stephanie thacker the founder and ceo of steadfast bookkeeping company which is a full service done for you bookkeeping and tax firm and i'm here to simplify all things bookkeeping and tax for your small business paying fees for accepting money from your customers is a bit of a bummer and i get it i know you worked hard for that money selling that product or service whatever it is and having to give away about three percent of that is no fun i know however when you're collecting payments using those free versions of venmo or paypal where there's no fee involved with taking the payment it is not helping your business and it's likely hurting it so let me tell you why first off there is a higher risk of scam or fraud we've seen it with so many of our clients and you can read about it all over the internet at the end of the day there's just not as much protection in those no fee personal versions of the app as there would be a bookkeeping software or an invoicing software where your invoices and your payments are secured and protected the second thing is that you're breaking the rules and who wants to be a rule breaker not me that's right paypal and venmo state that when you're using those free no fee services for businesses you're actually breaking the rules they have different versions they have business versions and personal versions if you read into that you'll see that for those free no fee versions where you're just sending money back and forth on the apps they want that to be kept to friends and family who are paying maybe for you know their half of dinner or paying um for something like that and not an actual business service so i don't know about you but i don't have time to mess around with that and be caught for something so silly the third thing is that it's nearly impossible to do bookkeeping when you're using those free personal versions of the app and the reason i say that is that especially if you're using a bookkeeper if you have a bookkeeper in-house or you're out sourcing to a firm or an individual they might see a thousand dollar payment come in they see a thousand dollar deposit coming from your bank and all it says is venmo and even if we were to log into venmo and look at those details unless the person has included a really good description we don't know what that money was for it's especially difficult if you're selling products maybe for 15 20 25 here and there it's really hard to know what the money is for even if it's you and you're if you're only doing your bookkeeping say once a month are you really going to remember every payment that came in and exactly what it was for no so it makes it really difficult to do bookkeeping that way at the end of the day you or your bookkeeper are probably wasting time trying to track down and remember what that money was for and that time could have just been spent and paying the three percent fees and you would have been better off that way anyways so what do i recommend instead well i always recommend using a software maybe you're using something like quickbooks online that is not only your bookkeeping and accounting software but you can also send invoices straight from quickbooks and accept payments and guess what they even have an option where you can accept ach payments where someone puts in their routing and checking number and those fees are far less than the credit cards even with a credit card processing fee it's typically somewhere between two and a half and three percent you can also use something like dubsado or honeybook or something like that if you're a service based business or if you're a product based business try using something like square where you can input the specific products that you're selling and their price that way when you go to collect payment from somebody you have detail on what you sold now you might be thinking yeah great i'm going to use that but then i have to pay that 3 fee or whatever it is well guess what i've got good news that 3 is actually a deduction for your business it's an expense that will come right out of your end-of-year profit so there's no need to fear the three percent like i said in the beginning i get it you work hard for the products and services that you sell and it kind of stinks to have to give that three percent away but you should really look at it as a convenience to doing business i mean remember when you had to accept checks or cash and then remember to go and take it to the bank and record it manually and all of those things who wants to do that that's definitely not efficient bookkeeping so it's way convenient and efficient to accept these payments online be able to see the detail and record it in your accounting software another thing is that you can easily build that three percent into your pricing and your customers won't even know or bad an eye at it so imagine you have a five thousand dollar package for photography services and you're going to start you know using quickbooks to invoice and maybe you'll be charged that three percent when they make their payment that could mean a hundred and fifty dollars well i bet if you raise your price from five thousand to five thousand one hundred and fifty dollars you're not going to lose a customer that way they would never know that your pricing used to be five thousand dollars and really that 150 dollar increase is pretty in insignificant anyways now if you've made the mistake of accepting payments this way it's okay you're not alone and you can go ahead and switch to a new method today now that you know and if you're looking for more advice and tips and maybe more mistakes that i've seen small businesses make in their bookkeeping check out this video right here because i talk about the top three bookkeeping mistakes and how you can avoid them in your small business also don't forget to subscribe by hitting the button right here because i release new videos every week all about simplifying bookkeeping and taxes for your business so i'll see you then