When it comes to payment processing for your customers, some of the most popular incentives in the marketplace today are cash discounting and surcharging. Why? Because it enables a level of freedom for business owners when they’re accepting payment for their goods and services.
But did you know that many loyal merchants are leaving their payment providers and ISOs because of the reconciliation nightmare these options can cause on the backend?
Cash discounting (just like the name implies) is the option to offer payment discounts for those customers who opt to pay with cash, while surcharging enables the merchant to assess an additional fee for those that opt to pay with credit. Both of these options have their own individual set of rules and implications that should be considered before integrating them into your payments flow. And both are widely used because of the leverage they provide for the merchant when it comes to payment remittance.
So, what’s the problem?
Put simply: this has the potential to be a reconciliation nightmare. Let’s take the following example…
Joe has just started a pool cleaning business and is anxious to get his customer funnel cranking. So, he starts off with a bang and services 35 homeowners in his first month! Out of these 35 new customers, Joe accepted credit card payments for 75%. Let’s say the total cost for the pool cleaning is $100 and Joe charged a 3% surcharge for each credit payment he received.
Okay, now, fast forward to the end of the month when Joe sits down to reconcile his reports. His revenue report shows that 75% of his payments were reconciled via a credit charge for $103, while the other 25% of his customers paid $100 cash. He pats himself on the back for a successful first month and then goes to check his deposits. And, to his complete surprise, they don’t match! He is now confused and agitated.
Well, to Joe’s undeniable frustration, that $3.00 surcharge fee on all of his credit transactions was taken out before the deposit was made into his account. This means he only saw $100 in revenue because the $3.00 revenue (allocated for the fee) was not accounted for anywhere in his reports. So, now his deposits are off and his reports are inaccurate.
This happens over and over again, all year long, until Joe’s processor sends a 1099-K which shows 3% more than what he has on his P&L. Now, Joe has to reluctantly pay his accountant to fix it. And all this could have been avoided so easily.
What’s the solution?
The Genie has an easy fix for this one! Our accounts receivable software automatically allocates the additional $3.00 revenue into the correct category using Technology Fees. So, now Joe can continue saving money on his transactions without even giving a second thought to what these savings may be costing him on the backend.
And that makes you the hero! After all, Joe needs to be out running his business – not wasting time reconciling batch statements and daily discounts. Biller Genie takes care of everything, so Joe can spend his time managing profit, not problems.
It’s easy. It’s transparent. And it will help you keep Joe (and all your other business owners) happy – which is, of course, the ultimate goal.
Trust the Genie… all your merchants are wishing for this one!