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October 10, 2019

These Top 7 Invoicing Tools Are Your Answer To Sending Small Business Invoices

There are lots of tasks you have to perform to keep your business operating. Ordering supplies and inventory, marketing to your customers, and — perhaps most importantly — getting paid. Getting paid for your services or products is critical to keeping your business on track. And to get paid, you have to invoice your clients — a task that’s made simple using invoicing software.

Invoicing software allows you to create and send invoices directly to your customers. But today’s software options take things a little further, providing you with a variety of tools that simplify getting paid and running your business. These options include creating estimates and proposals, tracking time and expenses, and integrating with payment gateways, so you’re no longer waiting on a paper check in the mail.

If you’ve explored invoicing software in the past, the many options out there can be overwhelming. That’s why we’ve created this guide. We’ve narrowed down the choices to seven of the best options on the market today. We’ll dissect each option, giving you the most important information, such as pricing and features. We’ll also look at the factors you should consider when making your choice. Invoicing software simplifies invoicing your clients, and this guide is designed to simplify choosing the best software for your business. Let’s get started!

What To Look For In Good Invoicing Software

The good news is that there are lots of invoicing software options on the market. The bad news? Choosing which one is best for your business can be a challenge. While forever-free options and free trials make it easy to shop around, know what to look for before you sign up by considering these factors.

Price: Nothing in life is free…or is it? Fortunately, there are plenty of invoicing software options available at no cost. What’s the catch? It depends on the software. Some software is ad-supported, while others place limitations on the number of clients you invoice or lacks features found in paid options. While free software may work in the beginning stages of your business, you may need a more robust program as your business grows. In this case, an upgrade may be an order. Be aware, however, that if your subscription costs more than $30 per month, there are more affordable options out there. Or you can use those funds to invest in full accounting software instead.
Strong Features:Â Any software you select should have a strong feature set. Specific features that you need vary based on your preferences and the needs of your business. At a minimum, though, every business should look for software that offers powerful security features, good mobile apps, a user-friendly interface, and a well-organized client portal.
Automations:Â Some invoices will need to be sent manually. Others can be sent automatically with software that offers invoice automation, allowing you to set up recurring invoices, send out reminders, and schedule other tasks. The more automations, the more smoothly your business runs, so you can get back to doing what you love most.
Integrations: The software you choose should integrate with third-party apps and software. For example, if you already use bookkeeping or accounting software, look for an invoicing solution that syncs with this software. It’s also important that your chosen software integrates with multiple payment gateways, allowing your customers to pay their invoices online easily.
Good Customer Support:Â There may come a time when you have a question about your software, need troubleshooting advice, or simply want to upgrade your subscription. All of this is made much easier with strong customer support and good customer service. Look for software that offers multiple ways to get in touch, has fast response times, and provides resources to help you get the most out of your software.

Zoho Invoice

Best overall invoicing software for small businesses. Ideal for businesses needing strong features, great invoicing automations, and international invoicing.

Zoho Invoice, introduced in 2008, has grown to become one of the most popular invoice software options on the market today. This cloud-based software offers some great features ideal for small- to medium-sized businesses and offers multiple pricing options, including a free version for business owners on a budget.

In addition to boasting such features as customizable templates and support for multiple languages, Zoho Invoice goes beyond merely invoicing. Through this program, you can create estimates, track time and expenses, manage contacts, and create and manage projects. Zoho Invoice also has a very user-friendly interface and excellent customer support. It should come as no surprise that Zoho Invoice has gotten overall favorable reviews from its users.

There are, however, a few drawbacks, although these are minimal. If you need an extensive inventory tracking system, look elsewhere, as Zoho Invoice only has a basic item list available. This software also falls a little short in terms of integrations, although that number is on the rise. At this time, Zoho Invoice has ten payment gateways and 14 integrations. For most businesses, though, this shouldn’t pose a problem, and the many positive aspects of this software overshadow the few negatives.

Pros

What makes Zoho Invoice’s offerings stand out from other invoicing software solutions? There are quite a few benefits to selecting this software, including:

Unlimited invoices and estimates
16 customizable invoice templates
Cloud-based
Easy to use
Invoicing in 14 languages
Excellent customer support
Well-designed client portal with real-time notifications
Expense and time tracking
30 reports
Exceptional customer support and resources
Multiple mobile apps

Zoho Invoice offers four pricing plans. The Free Plan allows one user to invoice up to five customers at absolutely no cost. For $9 per month, the Basic Plan gives one user the ability to invoice up to 50 customers. Upgrading to the Standard Plan at $19 per month gives access to three users and allows you to invoice up to 500 customers. The Professional Plan costs $29 per month, can be used by up to ten users, and has no limitations on the number of customers that are invoiced.

Invoice Ninja

Best for small businesses that want to save money with free software.

Small business owners — especially new ones — often look for ways to cut expenses. One way is to take advantage of free software, such as the invoicing software offered by Invoice Ninja. Since 2014, over 90,000 small business owners have signed up with Invoice Ninja for its great features at no cost — and no, there isn’t a catch.

This forever-free software boasts features you would find with paid software, including invoices and estimates, time and expense tracking, item lists, contact management, and project management. An especially unique feature is Invoice Ninja’s voice commands, which allows you to send invoices and perform other tasks using your voice. If you need assistance, Invoice Ninja offers multiple ways to get in touch and exceptional customer support. The software has overall received excellent reviews from past and present users.

The free version of Invoice Ninja is best for small businesses and freelancers that serve 100 or fewer customers. If you have more than 100 customers, you will have to upgrade to one of the paid (but still affordable) software options. If you also have more than one user, you will need to upgrade your subscription, as the free version only allows access to a single user.

Pros

Invoice Ninja is one of the top options for forever-free invoicing software. If you need additional features, you can upgrade to one of the paid subscriptions. However, many small businesses will find everything they need with the no-cost plan. All plans include the following benefits:

Unlimited invoices and estimates
Over 40 payment gateways
Excellent customer support
Cloud-based and self-hosted options
Strong mobile apps
Available in 30 languages
Up to 10 invoice templates
Recurring invoices and payment reminders

The Forever Free Plan is truly free and gives you access to all of the previous benefits. This plan allows one user to send invoices to up to 100 customers. If you have more than 100 customers, you can sign up for the Ninja Pro Plan. At $8 per month, you’ll be able to send invoices to unlimited customers. You’ll also have access to additional features, including 13 reports, proposals, and invoices that don’t feature Invoice Ninja branding. This plan is limited to one user only. Pay for ten months, and you’ll receive two months free. You can also take this plan on a test drive with a free 14-day trial.

If you have multiple users, you can sign up for the Enterprise Plan, which starts at $12 per month. Like Ninja Pro, you can pay for ten months and receive two months free. You’ll also receive a 30-day guarantee. This plan supports up to 20 users and offers additional benefits, such as support for third-party attachments and branded client portal links.

FreshBooks

Best for small businesses seeking an all-in-one invoicing and bookkeeping solution.

Freelancers and small business owners that want an invoicing software with bookkeeping options should look no further than FreshBooks. FreshBooks launched in 2003, but the company kept its software fresh with a revamp in 2017. The new version of FreshBooks offers lots of great accounting features, including double-entry accounting, journal entries, and bank reconciliation.Â If that’s more than you need, don’t worry — the old version is still available. FreshBooks Classic is true invoicing software with a few bookkeeping features. This software is a great choice for businesses that need basic bookkeeping and accounting functions but is not suitable for businesses that have more complex accounting needs.

With FreshBooks, you can send unlimited invoices and estimates to your customers. You’ll also be able to complete other tasks critical to your business, including time management, expense management, and project management tools. Depending on the plan you select, you may also be able to use features, such as bank reconciliation, reports, journal entries, and proposals. Both versions of the software are very easy to use, customer service is excellent, and FreshBooks has received mostly positive reviews from its users.

It’s obvious why over 10 million customers have chosen FreshBooks as an invoicing solution, but what’s the catch? Businesses with multiple users won’t find what they need here, as each plan only supports one user. If you have multiple businesses, another software will be a better fit, as FreshBooks doesn’t offer support for more than one business. While there are numerous integrations, FreshBooks only has two payment gateways.

Pros

FreshBooks stands out from its competitors because of its accounting features that you won’t find with other invoicing software. Other benefits of this all-in-one software include:

Unlimited invoices and estimates
Cloud-based
Support for 14 languages
Excellent customer support
Strong mobile apps
Two customizable templates
Up to 11 reports
Over 80 integrations
Recurring invoices and payment reminders

Unlike many of the other software we’ve recommended, FreshBooks does not offer a free plan. However, there are three pricing tiers available to fit your needs best. The Lite Plan is best for freelancers or microbusinesses with five or fewer customers who don’t need double-entry accounting. This plan’s price is $15 per month. The Plus Plan costs $25 per month and allows you to bill up to 50 customers. As a Plus customer, you’ll get even more features, including unlimited proposals, automated payment reminders, and double-entry accounting reports. The Premium Plan will set you back $50 per month but allows you to bill up to 500 customers. Additional team members can be added as users for $10 per person, and payment processing is also available for an additional fee.

If you need a more customized solution, you can inquire about the Select Plan. This plan is for businesses that need to bill more than 500 customers. This plan — which is custom priced based on the needs of your business — also gives you access to a personal account manager, custom training, and other features.

Bill.com

Best for businesses that want a simple, no-fuss solution for managing bills and invoices.

Software that does it all and comes packed with features is great for some businesses. But what if you’d prefer a hassle-free way to simplify bills and invoices? If this sounds familiar, Bill.com may be the right solution for your business. Since 2006, Bill.com has streamlined the process of paying your bills and invoicing your customers. With this software, you can take control of your accounts payable using tools, such as reviewing and approving bills from any device, sending domestic and international payments to vendors and suppliers, and storing invoices, checks, and receipts.

But that’s not all that Bill.com offers. You can also manage your accounts receivables through this software. With Bill.com, getting paid is faster and easier with features, including automated invoices, automated reminders, contact management, and direct payments with ACH, credit card, or PayPal. Bill.com syncs with your accounting software, simplifying the process of reconciling your bank accounts and keeping your books balanced. There are also some features you won’t find with most other invoicing software, such as a customizable chart of accounts.

This software is best for medium- to large-sized businesses that want a more streamlined way to send invoices and pay bills. Small businesses may also benefit if they have a large number of payments and/or invoices. While this software can be a bit pricey, it’s a fraction of the cost of hiring an employee to handle these tasks. However, keep in mind that if you only want invoicing software and have your accounts payable under control, there are more affordable invoicing software options out there.

Pros

If billing and invoicing are slowing down your business, take advantage of all that Bill.com has to offer, including:

Cloud-based
Unlimited document storage
Unlimited users (for an additional cost)
Strong security features
Up to 30 reports
Recurring invoices and payment reminders

There are four pricing plans available through Bill.com. The Essentials plan is the cheapest at $39 per user per month. With this plan, you can choose to manage payables orÂ receivables but not both. The Team plan costs $49 per user per month. This option also only includes payablesÂ orÂ receivables. The difference is that this plan allows you to sync the software with Xero, QuickBooks Pro, QuickBooks Premier, and QuickBooks Online. The third plan allows you to manage both receivablesÂ andÂ payables at the cost of $69 per user per month. This plan includes additional features, such as invoice and payment automation. Finally, you can get a custom quote for the Enterprise plan. It comes with all the features included in the other plans with the addition of advanced features, such as more integrations and API access.

Square Invoices

Best for product-based small businesses that want an easy way to send invoices on the go.

Square has become known for its payment processing services, but in 2014, the company added Square Invoices to the Square Dashboard. When you sign up for a Square account, you automatically have access to Square Invoices as well as other tools for your small business. One of the best things about Square Invoices is that it’s completely free to send invoices to your customers.

Square Invoices is very easy to use and has a well-organized interface. There is just one template for invoices, but it can be customized by changing the colors and adding your logo. Square Invoices is the perfect software for busy entrepreneurs, making it easy to send invoices right from your smartphone or another connected device. In addition to mobile invoicing, Square Invoices has other tools to help you operate and grow your business, such as estimates, contact management, employee management, advanced inventory features, and sales tracking. You can even create contracts and easily attach them to your invoices.

Square Invoices is best for small- and medium-sized product-based businesses. Because of a lack of project management features and advanced invoicing capabilities, it’s not a good fit for service-based or project-based businesses.

Pros

Square is more than just a payment processor. Its invoicing feature and other tools are also beneficial to many businesses. Why should you choose Square? Consider the following benefits:

Unlimited invoices and estimates
Excellent mobile apps
Cloud-based
An easy three-step process to send custom invoices
Recurring invoices and payment reminders
14 reports plus custom reports
Good customer support
Over 100 integrations

To use Square Invoices, you must sign up for a Square account. The good news is that your Square account is free. Sending invoices to your customers is also free. However, if you want to take advantage of some of Square’s other features — such as payment processing, payroll, or advanced employee management — there are additional fees.

Harvest

Best for small businesses that want to manage time, projects, and invoices in one place.

Harvest launched in 2006 with a focus on time tracking. Since it’s launch, the software has evolved to provide additional tools for small businesses. Though its invoicing features are limited when compared to its competitors, Harvest’s time tracking features, basic invoicing, and project management tools are ideal for service-based and project-based businesses.

You won’t find advanced invoicing features with Harvest, but there’s enough to get the job done. In addition to being able to create and send invoices, you can also create and send estimates, track time, set up recurring invoices, create reminders, and manage your employees. Harvest also offers basic expense tracking as well as project management options that allow you to assign projects, set budgets, and track time and expenses.

There are a few drawbacks to be aware of before you sign up. Harvest isn’t a good fit for product-based businesses or any business that needs advanced invoicing features. If you need more advanced accounting features or don’t have much use for the project management tools offered through Harvest, consider shopping around for another software option.

Pros

Why is Harvest on this list? In addition to being a great choice for project-based and service-based businesses, here are more reasons why you should consider using this software:

Unlimited invoices
Unlimited estimates (paid plan only)
Cloud-based
Unlimited clients
Over 90 integrations
Good customer support
Strong security features

Harvest offers two plans. The first is the Free Plan, which doesn’t cost a dime. This plan allows one user to manage up to two projects and gives access to all of the other great features. If you need to add more users or projects, you can sign up for Harvest Pro, which costs $12 per user per month. With this plan, you can manage unlimited projects as well as take advantage of Harvest’s other features. Harvest offers several discounts for Pro members, including 10% off when you pay annually and 15% off for nonprofits. You can also give Pro a try with a 30-day free trial.

Invoice2go

Best for creating and sending invoices through mobile devices.

Most business owners aren’t just sitting behind a desktop computer anymore. Today’s busy entrepreneurs are relying more and more on mobile devices to keep in contact with vendors and clients, collaborate with team members, and even send invoices. If you’re one of the people that prefers using your smartphone to conduct business, Invoice2go can help simplify sending invoices and getting paid by your customers.

Invoice2go features strong Android and iPhone apps that make it easier than ever to create customized professional invoices on the go. Setting up and using the software is simple, allowing you to send your first invoice in just minutes. Invoice2go offers additional features as well, such as expense tracking, invoice templates, estimates, time tracking, and purchase order management. You can send invoices in a variety of ways, including SMS and mobile apps. Cloud-based desktop software is also available if you prefer to go that route.

On the downside, though, Invoice2go — as the name implies — focuses primarily on invoicing. If you need more advanced bookkeeping and accounting features, another option will better suit your needs. If you don’t primarily use your mobile device for business purposes, Invoice2go likely won’t be a good fit for your business. Another downside is the limitations placed on the less-expensive subscription plans, which we’ll discuss in detail in just a moment.

Pros

Considering Invoice2go as your invoicing software? There are many reasons why you should choose this option, including:

Strong mobile apps
Good customer service
Unlimited storage
Easy to use
13 reports
Good customer service

There are several plans to choose from if you select Invoice2go as your invoicing solution. The Standard Plan allows you to send up to 200 invoices and 200 estimates per month. One user can use the software, and up to 25 clients can be added. The Standard Plan costs $9.99 per month. For $19.99 per month, you can sign up for the Advanced Plan, which allows you to send up to 400 invoices and 400 estimates per month. Two users are included in this plan, and you can add up to 100 clients. This plan also gives you access to appointments. The Unlimited Plan, at the cost of $33.99 per month, lives up to its name by allowing you to send unlimited invoices and estimates and store an unlimited number of clients. This plan gives access to five users and includes recurring invoices and payment receipts. All plans are billed annually. A 14-day free trial is available, and Invoice2go offers a 30-day money-back guarantee.

Choosing The Best Invoicing Software For Your Business

Choosing the right invoicing software can be a hassle, but there are a few things to keep in mind to help narrow down your choices. Start with the options in this post and compare pricing, features, and other factors to find software that works for your business. Don’t be afraid to shop around and even test out a few options before making your final decision. When testing out software, look for options that offer free plans or free trials, so you can fully explore the software before making an investment. If the software you test lags, is difficult to use, or it doesn’t offer the features you need, move on to another option until you find your perfect match. Your ideal match should have the features you need and make sending your invoices a breeze.

The post These Top 7 Invoicing Tools Are Your Answer To Sending Small Business Invoices appeared first on Merchant Maverick.

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October 4, 2019

The Best Free Credit Card Readers For Small Businesses

There’s no such thing as a free lunch.

People like to say that, but if you get a literal lunch for listening to a sales pitch on something you’ve already decided to buy, then that lunch is free. The mobile processing industry, though, typically doesn’t offer free lunches. Instead, they offer free credit card readers. These readers are usually simple swipe card readers or maybe EMV readers if you’re lucky.

Card readers used in mobile processing are typically inexpensive to make, so they are perfect candidates for free giveaways to entice new merchants to sign up. For a small business just getting started, anything free is usually good, especially after looking at the retail price of some of the high-end readers in the market (or even a conventional credit card machine). However, mobile processing isn’t just about the reader. It’s about the suite of services and credit card processing.

So if you are looking for a mobile credit card processing app, don’t make your decision based just on a free reader. Take a look at the app and the extra services provided as well as any upgraded card readers offered by the processor. Compare pricing and features to see if everything truly fits your needs. Even if you do not need any additional services right now, you might need them in the future, so make a plan if you can. Only after you’ve looked at the software and extra features should you take the free card reader into account and make your final decision.

Below, we give an introduction to how these mobile readers work and then talk about some commonly offered free readers. Hopefully, the information will help you make an informed decision for your business.

What Does A Swipe Card Reader Do?

Most people have used magnetic stripe, or magstripe, card readers before. They’re the readers with a slot that you move a card quickly through. This movement allows the device to read the data from the magnetic stripe on the back of the card.

With mobile processing, quite a few of the free readers are magstripe only readers. You may already have seen some around — little white squares attached to phones, popularized by the third-party processor Square, who gives them out for free. To read payment card information, the reader gets inserted into a headphone jack or a Lightning port of a phone or tablet.

There are some disadvantages to using only a magstripe reader. To understand why lets first look at the technology of magstripe readers.

How Swipe Card Readers Work

Not everyone is hungry to learn the science behind every technology. For instance, you the merchant probably don’t care that the magnetic stripe on a payment card has millions of tiny magnets in it. Or that each magnet is affixed in a north or south pole direction so that they can correspond to a zero or a one to make up a binary code to store data. You probably have no desire to learn that there are three strips of information stored in every magstripe. But so you know, the first and second strips store cardholder data, such as the primary card number, country code, cardholder’s name, and expiration date. The third strip stores an encrypted PIN, the country code, currency unit, and the amount authorized.

What you care about is whether the card reader is connected to your mobile device correctly so that the card information gets sent to your card processor. It doesn’t matter to you that a magstripe reader reads information off a credit card much like an old cassette player reads information from a cassette tape. (That’s about how long we’ve been swiping credit cards if it’s any indication.)

You might care, though, that this means that the credit card information on the magstripe can be easily stolen. Under some circumstances, you might get stuck with the loss on purchases made with that stolen card.

Credit Card Swipers Don’t Protect You From Fraud

Back in 2015, to get merchants to adopt the more secure EMV (Europay, Mastercard, and Visa) technology (i.e., chip on the card), the credit card companies decided to shift some fraud liability onto those merchants who hadn’t adopted the technology.

As of October 1, 2015, if a merchant only has a magstripe reader and a customer presents a stolen or fraudulent card with both a magstripe and a chip, the merchant would be responsible for the loss on the purchase. To shift the liability back to the credit card companies, the merchant need only have an EMV card reader.

Admittedly, if you’re just starting your business and do not expect to take a high volume in credit card sales or if you only sell smaller ticket items, assuming liability for taking a fraudulent card might be a risk you’re willing to take. That’s fine, but we at Merchant Maverick do encourage you to upgrade to an EMV reader sometime in the future for your protection. There’s little reason to delay upgrading because some free card readers in this article are combination EMV and magstripe readers, so you can eliminate the risk at no cost to you.

How Do You Get A Free Credit Card Reader?

A free credit card reader is not very difficult to find. Both merchant account providers and third-party processors will sometimes offer a free card reader to entice you to sign up for their mobile processing service.

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A lot of third-party processors are also mobile processors. Their primary offering is usually the mobile app and card reader. Sometimes, they make money not only on processing cards but also on other value-added services related to running a business in general, services such as invoicing and payroll processing. (Yeah, we’re looking at you, Square.) Once a merchant signs up, the processor will try to upsell and cross-sell these services to the merchant. It makes sense for some merchants — the centralized management of their business is an advantage.

Since an expensive reader can discourage signup, third-party processors often offer readers for free. They make it very obvious on their website that you can get a free reader. However, keep in mind that these services are designed for small businesses — they don’t expect you to need a lot of equipment. Your first reader might be free, but you will typically have to pay for any additional readers.

As to merchant account providers, they typically work with more established businesses that can afford (sometimes expensive) countertop registers and credit card terminals. It’s pretty rare to see credit card terminals given away for free. When they are, it’s usually only a “rental,” and you’ll have to return the equipment when you leave the processor. However, as mobile processing becomes more and more popular, many merchant account providers are starting to offer mobile processing services as a convenience to their existing customers. With these mobile processing services, the merchant account providers do tend to give away free mobile credit card readers. Sometimes the information is clearly advertised but not always. You might need to contact your payment processor and ask if you’re interested in adding on a mobile POS and card reader.

Let’s be clear: Just because you’ll get something for free doesn’t mean that you should immediately sign up with a particular processor. There are some negative issues you might wish to consider.

Why You Should Be Wary Of Free Credit Card Reader Offers

As already alluded to earlier, free card readers are generally provided as loss leaders — something provided for free or at a drastically reduced cost to bring in a new long-term customer. Often, this means that the reader will be a lower-cost magstripe reader, with no EMV capability. If that is the case, then you might not be able to recover losses from purchases made with cards using stolen credit card numbers. At this late date, there is very little reason to settle for a reader that doesn’t support chip cards, and doing so can make your business look a bit antiquated.

If you are getting a free mobile card reader (or a “free” device of any kind) from a merchant account provider, be aware that there could be a tradeoff. Of course, a top-rated merchant account provider such as Payment Depot will deal with their customers honestly and fairly and will give a free reader under their usual no-contract deal. Other merchant account providers, however, might require you to sign a contract to tie yourself to them for a more extended period. Read your contract carefully, so you understand which services you’ve signed up for and for how long. You should also understand how to get out of the contract if you’re not happy with the provider.

Despite the negatives and our caveats, all of these free readers will be serviceable. If you need one of these devices to get your business off the ground or for occasional off-premises use (e.g., trade shows), then these free readers should fit the bill.

How To Find The Best Free Credit Card Reader

Below, we will highlight four free readers currently available in the market. But, before we delve into the specifics of each, we want to point out a few benchmarks you should think about when considering any free reader.

Reader Type: Typically, these readers will read magstripe and potentially EMV cards. It’s unusual to get a contactless (i.e., NFC) reader for free. Keep in mind that a magstripe reader could create a liability issue for you under some circumstances, so it is better to have a reader that can take both magstripe and EMV.
Connection: There are two types of connections — physical connection or Bluetooth. The physical connectors can break off if you’re not careful, and a reader that uses a Bluetooth connection still needs to be periodically charged. We typically recommend a Bluetooth connection over a physical one since smartphones and tablets seem to be phasing out the headphone jack. For example, all the recent iPhones and the Samsung Galaxy Note 10 do not have headphone jacks.
Software: A card reader is just a piece of hardware. Without its supporting software, the reader is useless. Each business is different, however, so its software needs are different. Some businesses will prefer a no-nonsense basic mobile processing app. Others might want additional functionalities, such as inventory tracking. Be sure to think through your software needs before you decide on a free reader.
Battery Life: Battery life applies to Bluetooth and/or EMV readers. Ideally, you want something that can last you at least one day, so you can process credit card charges without interruption.
Peripherals: A basic, pocketable magstripe reader that plugs into a headphone jack or Lightning connector won’t have any peripherals, but Bluetooth and/or EMV readers need cables to charge them up. Other nice-to-have items include carrying cases, docks, clips, and even lanyards that allow the user to carry the reader without losing or damaging it.

Now, let’s look at four simple readers that are available for free. For ease of reference, we’ve put the card reader comparison information into a table:

	Payment Depot Swift B200	Square Magstripe Reader	Shopify Chip & Swipe Reader	PayPal Chip & Swipe Reader
Reader Type	EMV, Magstripe	Magstripe	EMV, Magstripe	EMV, Magstripe
Connection Type	Bluetooth	Headphone jack (for Android) or Lighting connector (for Apple devices)	Bluetooth	Bluetooth
Processing Software	SimpleSwipe	Square Point of Sale	Shopify Lite or Shopify POS	PayPal Here
Battery Life	420 transactions	Not applicable	400 chip or 700 swipe transactions	“all day”
Peripherals	Micro USB charging cable; mounting sticker	None	Stand, micro USB charging cable, mounting sticker, travel case	Device clip, micro USB charging cable

There are plusses and minuses to any free card reader. Ultimately, the “best reader” is the one that fits with the specific needs of your business.

Swift B200 From SwipeSimple

The Swift B200 from SwipeSimple is a Bluetooth magstripe and EMV reader. The parent company, CardFlight, makes two models of readers: the B200 and the B250 (which we review here). The B200 is the less expensive of the two readers, and it lacks the NFC card reader function in the B250.

The B200 can pair with both iOS and Android devices. It uses a rechargeable battery that lasts about 420 transactions. There’s a battery indicator LED light on the device, and the box includes a USB cable. You also get a lanyard and a carrying case.

SwipeSimple’s mobile processing app is available through several providers, but we recommend Payment Depot. Payment Depot is one of our top-rated providers because of its great customer service and fair, transparent pricing. The company also offers a mobile processing plan exclusive to Merchant Maverick readers, which includes the B200 reader for free (you can upgrade to the B250 for $25). You’ll pay $10/month plus 2.6% + $0.10 per transaction with no monthly minimums or additional fees.

We like the SwipeSimple app, and you can find more details about the app in our review. The app takes care of all your credit card processing needs without the clutter of too many extra features. If you’re a no-nonsense kind of person, this might be the app for you.

SwipeSimple Swift B200 Fast Facts

Reader Cost: Free (when you sign up through Payment Depot)
Payment Types Supported: magstripe, EMV
Companion Software: SwipeSimple
Connection: Bluetooth

Square Magstripe Reader

The Square Magstripe Reader is, as its name says, just a magstripe reader. This reader has been Square’s trusty free reader for many years, and it hasn’t evolved much. Of course, when Apple stopped providing headphone jacks on its phones, Square had to adapt to come up with the Lightning connector for its reader. (Soon, it will have to adapt again for Android phones, as Samsung seems to be phasing out headphone jacks too.)

Square

Visit Site

Read our Review

The Square Magstripe Reader does not need charging, and it’s small enough to fit in your pocket to be carried around. There’s a certain elegance in that sort of simplicity, even though it’s only a magstripe reader that can open the merchant up to liability from fraudulent cards.

Square does offer a tradeoff for that liability, and, for some, the risk might be worth it. The Square magstripe reader works with the very robust (and free) Point of Sale app as well as opening up the rest of Square’s highly-rated (and value-added) services to you. In addition to processing cards at 2.75% per transactions, the Point of Sale app can also track inventory, manage employee hours, keep track of appointments, and do much more. So before you rule Square out based solely on its magstripe reader, we encourage you to think about your company’s future needs and see if Square might be a fit for you after all. Here are our full Square review and our Point of Sale app review to help you make a better-informed decision.

If you decide you want to upgrade to one of Square’s other devices later, Square offers financing for all hardware purchases starting at $49 — conveniently, the price of its Contactless + Chip card reader.

Square Magstripe Reader Fast Facts

Reader Cost: Free (additional readers $10)
Payment Types Supported: magstripe
Companion Software: Square Point of Sale
Connection: headphone jack or Lightning connector

Shopify Chip & Swipe Reader

Shopify is better known as an online shopping cart and eCommerce platform. With its free POS software and credit card reader, though, it appears to be branching into stores with physical locations. The Shopify reader is of a proprietary design. It’s a magstripe and EMV reader that comes with a charging cradle. Packaged in a neat little carrying case, you’ll also find a micro USB charging cable, mounting hardware, and everything else you need.

Shopify Lite

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Shopify’s Chip & Swipe Reader connects to a mobile device through Bluetooth. The reader can process 400 chip transactions or 700 swipe transactions on one charge. It works with Shopify POS, which runs on both iOS and Android devices. If you subscribe to any of Shopify’s eCommerce plans, the POS app and hardware are included as part of your service. However, if you’re just interested in the mobile app and some tangential eCommerce features, you can opt for the Shopify Lite plan, which goes for $9/month and 2.7% per transaction. It doesn’t include access to all of the advanced features, but as a mobile offering, it’s quite serviceable.

Be sure to check out our detailed review of the Shopify Chip & Swipe Reader. We have reviewed Shopify’s eCommerce plansÂ as well as its Shopify Lite plan and Shopify POS software. Take a quick look at the reviews and see if Shopify is a good fit for you.

Shopify Chip & Swipe Reader Fast Facts

Reader Cost: Free
Payment Types Supported: magstripe, EMV
Companion Software: Shopify POS (with eCommerce plan or Shopify Lite)
Connection: Bluetooth

PayPal Chip & Swipe Reader

PayPal first made its name as an online payments processor. These days it’s more of an all-in-one solution for businesses, including its free mobile software, PayPal Here, and the free card reader that comes with it. Like most other free readers in this article, the PayPal Chip & Swipe Reader is a magstripe and EMV reader that connects to a mobile device via Bluetooth. The reader comes with a micro USB charger and a clip for attaching the reader to the mobile device.

PayPal Here

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According to PayPal, the reader has enough battery to last all day. However, a little digging in the comments section of reviews and tech support messages suggests that some people have issues with the battery life. So you might want to proceed with caution if long battery life is important to you.

PayPal, like its closest competitor, Square, used to offer a free basic card reader. However, it discontinued that offer and implemented account restrictions on merchants who use the basic magstripe reader (see our PayPal Here review for more information on that). The free Chip & Swipe reader is a nice alternative to this policy. The mobile app is free to use, with transactions processing at 2.7%.

Signing up with PayPal gives you access to all its payment-related services. Make sure you understand the full scope of PayPal’s business as you consider whether or not to get the PayPal Chip & Swipe Reader. And if you do want a mobile card reader with contactless support, check out the PayPal Chip & Tap reader.

PayPal Chip & Swipe Reader Fast Facts

Reader Cost: Free
Payment Types Supported: magstripe, EMV
Companion Software: PayPal Here
Connection: Bluetooth

As you look through the reviews, don’t forget to look at the upgraded readers available from each provider. You might wish to take these readers into account, so you’ll know how much more it might cost you in the future to upgrade.

Don’t Be Fooled By The Promise Of A Free Card Reader

Mobile card readers are usually loss leaders used to entice merchants to sign up with a particular card processor. The free readers tend to be a simple piece of hardware without a lot of extras, and they tend not to be able to read NFC signals, so customers won’t be able to tap to pay. For the card processors, free readers are merely a way to introduce you to their other services.

Before you sign up, it’s important to research the processing company to make sure the mobile software and other features are worthwhile and that the pricing works for you. Otherwise, while you might get your free card reader, you will suffer the administrative headaches or reduced profits that come with choosing the wrong credit card processing company.

Lastly, don’t forget to read our article, The Best Credit Card Readers For Your Small Business,Â for a truly comprehensive discussion on the best card readers in the marketplace today.

Have you used any of these free readers? If so, what’s your experience with them?

The post The Best Free Credit Card Readers For Small Businesses appeared first on Merchant Maverick.

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September 19, 2019

The âHow-Toâ For One Page Business Plans

You have an idea for a new product that you can’t wait to introduce to the market. Or maybe you’re ready to take your freelancing career to a new level by launching your own business. Maybe your situation is a little different, and you’re ready to trade in your 9-to-5 to become your own boss.

Whether you have the next big invention or you’re an aspiring entrepreneur, starting your own business always requires one important detail: a business plan. A business plan works as a blueprint or roadmap for the success of your business.

Does hearing the words “business plan” conjure images of a huge stack of papers filled with graphs, charts, and every single detail of your business? Don’t break out into a sweat just yet. There’s good news: your business plan can be just one page. Yes, you read that correctly.

While there are certainly more complex business plans that you may need to explore at a later time (or perhaps not at all, depending on your business structure), many businesses can get started with a single-page business plan. In this post, we’re going to take a look at why you might pursue a one-page business plan. We’ll break down what you should include in your plan, discuss situations where you may need a more detailed plan, and even share a template that can help you get started.

If creating a business plan seems intimidating, keep reading and we’ll show you how easy it is to get started.

What Is A One-Page Business Plan?

It should come as no surprise that a one-page business plan is exactly what it sounds like: an overview of your business that fits on a single page. This document is used to convey your business idea succinctly, as well as give a brief outline of your goals and how you will reach those goals.

The terms “one-page business plan” and “lean business plan” are often used interchangeably. These two types of business plans aren’t exactly the same. A lean business plan is a more condensed version of a fully detailed business plan and typically uses bullet points and short summaries. A lean business plan may be longer than just one page. On the other hand, a one-page business plan must fit on one page and be written in a legible font size. No 4 point font allowed!

An executive summary is a similar document, but it’s not exactly the same. Many detailed business plans include an executive summary, or it can stand alone. An executive summary provides key details about your business and is usually written out in sentences instead of bullet points. A well-written executive summary may also take up two to three pages.

For this post, though, we are focusing solely on the one-page business plan, when it’s appropriate to use (and when it’s not), and what should always be included. Let’s start off with the basic structure.

The Basic Structure

Business Overview
Objectives
Experience
Target Market
Your Competition
Financial Summary
Marketing Strategy

Remember, keep everything clear and concise to fit all relevant information on a single page. A good rule of thumb is to keep each section to one or two sentences or bullet points.

Should You Use A One-Page Business Plan?

Every business — no matter how big or small — should have a business plan, and a one-page plan is a great place to start. This plan should help provide a basic overview of your business in its early stages. A one-page business plan is one of the best ways to map out the goals for your business and how you plan to reach these goals.

A condensed business plan can also be used to pitch your business idea to potential investors, partners, or customers. While you may need a full business plan later (more on that in a minute), your one-page plan serves as an excellent introduction to your business.

Writing a one-page business plan may also help you when crafting a lengthier plan further down the road. Because a one-page plan must be concise, writing yours should assist you to clearly convey your thoughts and cut down on unnecessary and lengthy wording.

However, there are times when a one-page business plan just won’t do the job. If you have a very complicated business idea or multiple partners, for example, a condensed plan won’t work for you.

If you’re seeking capital for your business, a formal business plan is a more appropriate choice. Banks typically require a formal business plan when applying for a loan. You may also be required to submit a formal business plan for other types of business funding, including Small Business Administration loans, grants, and startup loans.

What You Need To Create A One-Page Business Plan

Ready to get started on your business plan? Before you start tapping away at your laptop, map out everything you need first to make the process quicker and easier. Remember the basic structure we discussed earlier? Let’s break down each section so you know exactly what to include.

Business Overview

In this section, you should first state the problem that you have identified. Then, you will give a brief description of how your business will solve that problem. In other words, what product or service do you offer that will fulfill a need in the market?

Remember, you’re limited on space, so it’s important to get directly to the point without being too generic. You want to make a statement that shows how your business stands out from the rest.

Objectives

For this section, you really need to sit down and think about your objectives for your new business endeavor. These objectives should be a list of the goals you have in starting your business or selling your product or service. Every business has different objectives, so think about what’s most important for you. Do you want to be your own boss? Do you want to provide outstanding service in an industry where service is lacking? Have you set a revenue goal?

Think about short-term and long-term goals for your business and jot your ideas down. Your objectives should be clear, concise, and arranged in a bulleted list.

Experience

This section is used to outline the specific things that qualify you to be a successful business owner. This could include your educational background, industry experience, work history, or even your own experiences as a customer that led to your business idea.

Having a resume on hand can make this section easier. It’s also a good idea to have a resume ready for when you seek funding in the future, as some lenders require this as part of their documentation requirements.

Target Market

In this section, you will provide information about your target market. Who will be your customers? What are the needs of these customers?

More specifically, focus on the following:

Will you sell your product/service to consumers or businesses?
What is your key demographic? Consider factors including age, income, and lifestyle.
Why do these customers need your product/service?
Why should customers buy from you?

To answer these questions, you have to do your research. There are a number of ways to do this, but the internet will be your greatest resource. You can use the internet to create surveys, check out industry studies, and do your due diligence on comparable businesses.

The only drawback is that serious market research costs money that most startups don’t have. For now, keep it simple. As your business grows and you develop a formal business plan, you can explore investing money in your research. For now, focus on free and low-cost methods for learning about your target market.

Your Competition

This section focuses on your competitors — who is your competition? Consider comparable products, services, and/or businesses that offer something similar to what you offer. Do they have any competitive advantages? Perhaps most importantly, what advantages do you provide? What do you offer customers that would make them choose your business, product, or service?

For this section, you can use the market research from the previous section. Again, you want to keep it simple here, but as your business expands and you create a more comprehensive business plan, you may need to invest money in additional market research.

Financial Summary

Now, let’s talk numbers. In your financial summary, there are several important numbers that need to be listed. The first is your startup costs. If you haven’t launched your business yet, you may not have exact figures — after all, you always have to expect the unexpected — but make sure to do your research to get solid estimates.

You will also need to figure out ongoing costs to operate your business. This could include a lease or mortgage, marketing expenses, hiring and training employees, payroll, insurance, and other expenses.

Finally, the last number you need for this section is your revenue. How is your business going to be profitable? What are you going to charge for your product or service? How many customers would you need to meet your revenue goals? You may already have an idea in mind, but you can research comparable products or services to make sure your pricing remains low enough to be competitive but high enough to bring in a profit. If your business is currently in operations, you can review your bank statements and other financial documentation.

Marketing Strategy

By this point, you should know how much revenue you need to be profitable. Now, it’s time to think about how to get that revenue by writing down your marketing strategy.

Remember, this is a one-page plan, so you don’t have to list out every single detail. If you plan to grow your business, this is something you will need to explore further in the future. For now, though, there are a few things to keep in mind.

The first thing to figure out is your budget. There are lots of free and paid marketing tools available. As a new business, start with free and low-cost marketing methods until you figure out what works. Once you’ve had a chance to test out different strategies, you can always invest more in the future. Don’t forget to add this estimate into your business costs.

Next, consider what your competitors or similar businesses within the industry are doing. In your eyes, which methods have been successful … and which have been total flops? You also want to think outside of the box here. While it’s certainly okay to do things your competitors are doing (such as advertising on social media), you also want to come up with unique ideas that make you stand out from the competition.

One-Page Business Plan Template [Download]

With everything involved with launching your own business, even something as simple as creating a one-page business plan can be completely overwhelming. If you don’t know where to begin, don’t worry — we have you covered. Check out our one-page business page template.

Get Our One-Page Business Plan

This easy-to-use template can help you get started on the right track. With our template and the tips in this post, you’ll be able to create a professional one-page business plan in no time!

You’ve Created Your Business Plan. Now What?

Congratulations! You’ve created your one-page business plan. Now, it’s time to put that business plan to use.

If you haven’t yet launched your business, you can use your business plan as a road map to get started. You have your goals in place, you’ve started to calculate your expenses, and you know how much money your business needs to make to be profitable and successful. It’s time to take the first step toward reaching these goals and getting your business off the ground.

You can also use your business plan to pitch your business idea to investors or partners. However, be aware that a formal business plan is often needed when seeking capital (i.e. getting a bank loan). Remember, this one-page plan is a great starting point that can give you practice in clearly and succinctly communicating your ideas.

Ready to get started? Check out the following resources for more help in launching your business:

Small Business Startup Loans: Your 8 Best Options
SBA Loans For Startups: Types, Terms & How To Apply
How Much Money Do You Need To Start A Business?
Everything You Need To Know About Small Business Payroll
How Health Insurance Works For Businesses With One Employee

The post The âHow-Toâ For One Page Business Plans appeared first on Merchant Maverick.

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September 14, 2019

ACH VS Wire Transfers: Which Payment Method Is Right For You?

Here at Merchant Maverick, we usually focus on the many ways a business can take in money from customers. In this article, however, we want to discuss a little about how a business can pay money out (to vendors, for example).

Often, for smaller items like office supplies, you can use a business credit card or even cash. However, for larger ticket items such as manufacturing equipment, inventory, or even payroll, you might have to use checks, ACH transfers, or even wire transfers. This article focuses on the difference between ACH payments and wire transfers. Read on to find out more.

How Banks Transfer Money Between Accounts

In order to understand the difference between ACH payments and wire transfers, it’s useful to understand how banks transfer money between two accounts. Note that this general method has been in use since the 1600s. In recent decades, the process has been automated so that the information can be transmitted over privately maintained and secure computer networks.

Transfers Within The Same Bank

The simplest type of money transfer occurs between two bank accounts located at the same bank. For example, maybe Joe and Steve bank at the same bank, and Joe wants to transfer $10 to Steve. The bank merely makes a ledger entry in the two accounts to show that $10 has been moved from Joe to Steve.

If Joe and Steve do not bank with the same bank, however, then there are two ways to transfer the money.

Transfers Between Two Different Banks

The first method involves two banks that have bank accounts with each other.

Let’s say Joe, who lives in Los Angeles, banks with Super Bank, which is also located in Los Angeles. Joe wants to pay Steve $10. Steve, who lives in New York, banks with Mega Bank, which is also located in New York. Super Bank and Mega Bank have bank accounts with each other. So, Super Bank makes a ledger entry to take $10 from Joe’s account and places it in Mega Bank’s account located at Super Bank. Now Mega Bank has an extra $10.

Back at Mega Bank in New York, Mega Bank makes a ledger entry and pays $10 to Steve. Mega Bank now no longer has an extra $10. The practical effect is that Joe has paid Steve $10 even though no bag of money moved from Los Angeles to New York.

Transfers Through A Central Bank

What if Super Bank and Mega Bank do not have bank accounts with each other? But maybe there is a third bank–let’s call it Central Bank–where they both have bank accounts.

So, when Joe asks $10 to be transferred to Steve, Super Bank tells Central Bank to move $10 from Super Bank’s account at Central Bank to Mega Bank’s account at Central Bank. Once Mega Bank is notified that it has an extra $10 in its account at Central Bank, it pays Steve the $10 “sent” by Joe. Again, the practical effect is that Joe has paid Steve $10, but only a ledger entry was made at the Central Bank. No money physically moved anywhere.

Batching For Efficiency

With modern commerce, this sort of transfer could happen millions of times a day back and forth between people who bank at Super Bank and Mega Bank. It would be silly for Central Bank to move, say, $10 between the banks’ accounts back and forth all day long, every time a transfer order is made. So, to be more efficient, banks traditionally hold all the transfer orders until the end of the day, so they can total up the transfers and do only one transfer on the net change. This is called batching. While batching traditionally happens at the end of each business day, there’s no reason why this couldn’t happen several times a day or even once every several days.

The Central Bank

As for our hypothetical Central Bank, each country in the world usually has its own version of a central bank. In the US, that bank is the Federal Reserve. US domestic money transfers between banks usually go through the Federal Reserve. For international transfers, banks usually have to have direct accounts with each other, or they have to find a bank to act as the central bank.

What Is An ACH Payment?

Once you understand how banks transfer money between themselves, then it’s easy to explain an ACH transfer. The ACH transfer is simply a money transfer using a specific type of code. The code is set up and governed by an organization called Nacha (previously NACHA, which stood for the National Automated Clearing House Association).

When money is transferred domestically within the US, the code is transmitted over a computerized network called the ACH Network using the Federal Reserve as the central bank. When money is transferred internationally, the ACH code is usually transmitted over the SWIFT network (a privately owned computer network usually used for international money transfers) to a bank outside the US that takes ACH codes. That international bank can receive the money directly or act as a central bank.

ACH Transfer Fees

It’s important to separate the concept of the physical computer network from the ACH code. As mentioned above, for US transfers, the ACH code is transmitted over the ACH Network. The ACH Network is owned by several large banks, and together they charge a fee for messages transmitted over that network. The fee can range from $0.20-$1.50 per transaction or 0.5%-1.5% of the total transaction cost. In any event, the fee is relatively small so that some US banks do not even charge their customers for making ACH transfers.

For international transfers, the ACH code is usually transmitted over the SWIFT computer network. The SWIFT network charges differently than the ACH Network, and it usually charges more. If you wish to make or take international ACH transfers, we recommend you speak to your payment processor or your bank first so you can understand the charges involved.

ACH Transfer Times And Dollar Limit

ACH transfers are done in batches for efficiency. Typically, the batch is sent out once in a 24 hour period, usually at the end of the day. Nacha, however, is working to increase the number of batches processed per day and hopes to perform up to three batches per day in 2021.

ACH transfers are typically for smaller amounts because there is a per transaction limit of $25,000 for same-day transfers. However, by March 20, 2020, that limit will be raised to $100,000 to better serve the needs of business-to-business (B2B) companies.

Types of ACH Payments: Debit VS Credit

There are two subtypes of ACH payments: credit ACH payments and debit ACH payments. Credit ACH payments tend to be one-time payments while debit ACH payments tend to be recurring payments.

ACH Credit Payments: With an ACH credit payment, the sender of the money must authorize each payment before money is transferred out. The recipient of an ACH credit payment first gives the sender his bank account number and bank routing number. The sender then sends the bank information along with instructions to its bank to pay a certain amount. The payment information is batched and then sent to the central bank for settling according to a daily schedule. Once the transfer is settled, the money shows up in the recipient’s account. This type of payment is better suited for payroll or occasional bill payments where you want to control when and how much to pay.
ACH Debit Payments: With ACH debit payments, money of varying amounts is taken from an account according to a set schedule. This type of payment is better suited for recurring bills such as utility payments. With ACH debit, the payor sends the information to the entity where payment is due (e.g., the utility company). The information includes account number, routing number, and a payment authorization to pay on a certain date of each month. On that date, the recipient of the payment sends a payment request to its bank. The bank batches the information and sends the information through the central bank to the payor’s bank. The payor’s bank checks for previous authorization and for sufficient funds in the account. If there are sufficient funds, then the payor’s bank tells the central bank to release the money.

If you wish to accept or receive ACH payments on a regular basis, we have an excellent article covering the basics. Talk to your payment card processor to find out the details on the costs and setup.

For high-risk businesses, ACH payments might seem like an ideal alternative to credit card processors, which typically charge much higher fees with more stringent requirements. The first thing you should know is that not all ACH payments are handled in the same way because of how check payments are regulated.Â We have an article covering this subject in detail, but the bottom line is that depending on your business, it could be a good option. However, in some cases you’ll still need to meet underwriting requirements similar to what credit card processors require so you may need to look for a processor that specializes in working with high-risk businesses.

What Is A Wire Transfer?

A wire transfer is a traditional way banks transfer money using the method described earlier in this article. Wire transfers predate computer networks. Originally, banks simply transmitted the money transfer messages over telegraph lines. In today’s computerized world, however, domestic US wire transfer messages are transmitted over the Fedwire network or the CHIPS network. International wire transfer messages are usually transmitted over the SWIFT network.

With a wire transfer, a bank transfers the money right away without batching. Depending on the business relationship between the sending and receiving banks, they could transfer the money by simply adjusting their account ledgers (when they hold accounts with each other) or use a central bank. With international wire transfers, either method can be used, but with domestic US wire transfers, the Federal Reserve usually acts as the central bank. Because wire transfers are specific, one time transfers, they can be ordered and effectuated whenever the sending bank, the receiving bank, and the central bank are all open for business.

The Cost Of A Wire Transfer

Wire transfers typically cost much more than ACH transfers. For domestic US wires, it usually costs between $10-$35 to send a wire, though often it’s free to receive one. International transfers often cost more.

It’s not difficult to understand why banks charge more for wire transfers. These transfers are done individually without batching, so there are no savings from efficiency. The Fedwire, CHIPS, and especially SWIFT network all charge more than the ACH Network. Finally, with a wire transfer, the process is not automated, so a bank employee must initiate and confirm the transfer, thereby adding more cost to the transaction.

How To Make A Wire Transfer

In order to make a wire transfer, you must know the account and routing number of the recipient. After that, you must contact your bank and ask them to make the transfer. You can specify the date of the transfer, but you cannot specify the computer network the bank uses to send the transfer order.

There is no monetary cap on a wire transfer. Unlike ACH transfers that can be scheduled for recurring payments, wire transfers are one time only transfers that are irreversible once made. Wire transfers, therefore, are not well-suited for regular payments such as payroll or utility bills. Instead, wire transfers are typically used to pay for one-time equipment purchases or large inventory.

Wire Transfer And High-Risk Merchants

Lastly, there seems to be no reason why high-risk merchants cannot use wire transfers to send or receive payments. However, because wire transfers are expensive, it may not be cost-effective if the purchases are for smaller amounts.

One last thing to note: while some people use the term wire to refer sending money through Western Union or other person-to-person transfer services like Venmo, these are not true wire transfers. They use a different business model and messaging network. It is, therefore, important that these money transfer services should not be confused with true bank-to-bank wire transfers.

How Secure Are ACH Payments & Wire Transfers?

When it comes to security for ACH and wire transfers, there are a number of fairly obvious points of vulnerability. Money transfer messages can be hijacked in mid transfer, or fraudulent transfer messages can be initiated by criminals.

On hijacking messages, the networks used for these transfers are usually private networks with controlled access. The messages transmitted are encrypted, so the messages are relatively secure. There have been several instances of the SWIFT network being hacked (through malware infections) and money being stolen. However, the losses are assumed by the banks. You, as the merchant, are unlikely to have to be responsible for these unauthorized transfers.

From a merchant’s standpoint, you should keep bank account information secure by observing best practice security procedures. Typically, money transfer information can be stolen through social engineering methods such as hijacking a corporate officer’s email to order a money transfer to the hacker’s account, posing as a vendor and asking the payment to be routed to a different account, posing as an employee and asking payroll to be sent to the hacker’s account, or pretending to be a party in a mortgage closing and sending “updated” account routing information to steal the closing funds. Be sure to educate employees who handle money transfers to be aware of these vulnerabilities and scams so that both ACH and wire transfer account information can be kept safe.

Dealing With Disputes For ACH Payments & Wire Transfers

What happens if you make an incorrect wire transfer or realize a business deal is in dispute and you wish to withhold an ACH payment? With wire transfers, the transfers are final, so you cannot reverse the payment. With ACH payments, a transfer can be reversed under three very limited circumstances:

Transaction was never authorized and authorization was revoked.
Transaction was paid on a date earlier than authorized.
Transaction was for incorrect amount than authorized.

ACH transaction disputes must be filed within 90 days of the transaction (60 days after statement sent to account owner). If you wish to learn more, our article on ACH payments includes a detailed explanation of the ACH dispute policy.

Should You Use ACH Payments Or Wire Transfers?

ACH Payments and wire transfers each have their uses. If you wish to send or receive smaller payments that can be scheduled and paid out automatically, ACH is likely the way to go. However, if you have larger, one-time transfers that are time-sensitive, then wire transfer is pretty much your only choice. ACH costs much less than wire transfers, but a large part of that is because ACH is an automated process requiring no human intervention while a wire transfer requires humans to send and receive the payment.

At the end of the day, no business can survive by paying with or receiving only ACH payments or wire transfers. While understanding these payment options can add to your normal payment card processing options, unless you do business only with other businesses, it would be difficult to require your customers to pay only with ACH or wire transfers. It would make better sense to merely add ACH and wire transfer as a payment option.

The post ACH VS Wire Transfers: Which Payment Method Is Right For You? appeared first on Merchant Maverick.

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August 26, 2019

Can You Really Run A Cash-Only Business?

If you’ve been reading this website for a while, then you know that we began as a place focused on demystifying the world of credit card processing for small businesses. You might wonder, then, what we’re doing writing an article about a cash-only business. The fact is, we see both advantages and disadvantages to such a business, and we want to share some of our thoughts with you.

While most businesses do take some cash payments, some businesses are particularly suited to be cash-only. These businesses tend to be small and provide the services or sell their merchandise in person; the items sold also tend to be of smaller value. Below we have compiled a non-exclusive list of such businesses as well as a general overview of advantages and disadvantages for taking only cash payments.

Credit Card Processing Doesn’t Have To Be Expensive

heading	Payment Depot	Fattmerchant	National Processing	Dharma	Square
	Payment Depot	Fattmerchant	National Processing	Dharma Merchant Services	Square Payments

	Get Started Review	Get Started Review	Get Started Review	Get Started Review	Get Started Review
Availability	US-based businesses	US-based businesses	US-based businesses	US-based businesses	US, Canada, UK
Serves in-store, mobile, and eCommerce	â	â	â	â	â
No early termination fee	â	â	â	â	â
Compatible with most POS systems	â	â	â	â
Rate matching / negotiableÂ	â	â	â	â
High-quality sales and customer service	â	â	â	â
Pricing model	Interchange-plus	Interchange-plus	Interchange-plus	Interchange-plus	Flat rate
Monthly fee	$49	$99	$10	$20	$0
Standard retail rates	0% + $0.15 markup	0% + $0.08 markup	0.20% + $0.10 markup	0.15% + $0.07 markup	2.75% total
Good for higher volume (over $20K/month)	â	â	â	â
Good for mid volume ($10K-20K/month)	â	â	â	â
Good for lower volume (under $10K/month)	â		â		â
	Get Started with Payment Depot	Get Started with Fattmerchant Payments	Get Started with National Processing	Get Started with Dharma Merchant Services	Get Started with Square Payments

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Each of the above companies provides excellent customer service and fair pricing.

Why Would You Want A Cash Business, Anyway?

It is no secret that we are moving towards a cashless society, where customers carry little to no cash and make purchases through credit, debit, or cash cards. However, if you look carefully, you’ll notice that cash-based businesses are still lurking everywhere. Any kid can set up a lemonade stand or mow a neighbor’s lawn. Typically, you would pay them in cash. Same with a street musician or a hotdog stand by the sidewalk. Most likely, you will pay cash to your babysitter and maybe your dog walker too.

Cash-only businesses are typically new or “temporary” or side hustles, and they take only cash because they want to minimize start-up costs, they do not accept returns, and they do not have the time or desire to listen to pushy salespeople to learn the ins and outs of payment processing or buy any related equipment. In other words, they take only cash because cash is easy.

The Best Cash Businesses

Some businesses are especially suited as cash-only business. Below is a non-exclusive list to give some examples of such businesses.

Coffee, food cart, or food truck operator
Bakery, deli, or lunch stand
Small restaurant
Lawn mowing service
Laundromat
Vending machine operator
Errand service
Farm stand/farmer’s market vendor
Arts and crafts show vendor
Street artist (face painter, caricature artist, street musician, or similar)
Babysitting services
Pet services (pet sitting, pet grooming, pet training, dog walking. etc.)
Personal trainer or fitness instructor
Handyman services
Music teacher/tutor
Hair/nail salon or barbershop

Note that these businesses tend to be single-person operations that can be set up easily and quickly. With some notable exceptions like a laundromat, they tend to be mobile, with no physical business address. The goods or services they sell are usually lower priced, and customers do not usually demand refunds after purchase.

Advantages of Going Cash Only for Payments

Most businesses take cash in addition to other forms of payments. For this article, though, we truly mean cash only. This means no credit or debit cards, cash cards, gift cards, cash transfers (Venmo, Zelle), or personal checks. The business takes paper bills or coins, and that’s it.

We start below by discussing some advantages of going cash only.

Lower Costs & Overhead (No Processing Fees)

Compared with taking credit cards, taking cash saves your business money. In order to process credit cards, you would need to buy or lease the equipment to read the cards. After you get the equipment, you would have to spend time (or money to hire someone) to maintain the equipment.

In addition to needing equipment, each swipe/dip/tap of a payment card costs you money to process. The cost is percentage-based, so it’s difficult to know ahead of time how much each use of a payment card would cost you. As well, some processors charge additional monthly or per incidence fees. These charges can add up and affect your profitability, especially if you operate a small business with narrow margins.

When you take only cash, all of the above issues go away. You won’t need any equipment except a cash register or maybe just an old fashioned calculator. You won’t have to deal with recurring monthly charges for services you may or may not need. Best of all, you won’t have to pay a processing fee every time a customer pays you, so your profit margin stays intact.

No Risk Of Funding Holds

When you take cash, you get your money right away. With payment cards, your account won’t be funded until 24 or maybe up to 72 hours later. Even after that, with card payments, you are at risk for chargebacks. A customer could reach back several months after a purchase to demand their money back so that your sales are not always final until many months after the purchase. Your processor could freeze your account if you have too many chargebacks or even terminate your account altogether. With frozen or terminated accounts, you might not get back the charges in those accounts at all.

With cash, you’ll never have to worry about any of these issues. You get your money right away, and, unless a customer complains and you decide to refund their purchase, you’re never obligated to pay back what you have already taken in.

Simplified Accounting

If you take cash, you can simplify your business’s accounting needs.

There are two ways to keep your books: the cash method and the accrual method. The cash method doesn’t have anything to do with taking incoming payments only in cash. It merely means that you book a sale or expense when you actually receive or pay for the goods or services.

For instance, if you receive an order for widgets on August 31, send the order out, and receive your payment on September 15, then you book the sale on September 15. If you purchase office supplies on August 31 and pay the invoice on September 15, you book the expenditure on September 15. The cash method is considered the simpler of the two accounting methods. It gives you a realistic understanding of how much you have in the bank but does not take into account future income or expenditures.

With the accrual method, you book the sale or expense when you make the sale or incur the expenditure, even if you don’t receive the payment or don’t pay out the money until later. For example, if you receive an order of widgets on August 31, you will book this sale for August 31, even though you give your customer 30 days to pay so that they won’t have to pay until September 30. Likewise, for a purchase you make on August 31, you will book the expenditure on August 31 instead of waiting for when you actually pay, possibly 30 days later. With the accrual method, you must track your business’s finances with accounts receivables and payables.

If you take cash payments only, no matter which accounting method you use, you can simplify your accounting. With the accrual method, your accounts receivables are always up to date because you have already received the money and won’t have to keep track of them after that. If you use the cash method, you won’t have to deal with money you expect to receive in the future because, even though the method doesn’t require you to book the sale until you actually receive the money, you do, in fact, receive the money right away because you are paid in cash at time of sale.

Disadvantages Of Going Cash-Only for Payments

Even though becoming a cash-only business can reduce certain overhead and administrative headaches, they create inconveniences as well.

Lost Customers

Most customers today no longer carry a large amount of cash and prefer instead to pay with a credit or debit card. Going cashless means that these customers won’t be able to make purchases at your business unless they either have the cash on them or can access a nearby ATM. Even assuming these customers heed the cash-only sign at the door and manage to get the cash to complete the purchase on their first visit to your store, they might not come back because they might not want to deal with the inconvenience of paying with cash again.

Few Growth Opportunities

Taking only cash can reduce your business’s growth opportunities. Cash might make sense when your customer must physically be present to get that cup of coffee or get their pet groomed, but if you have the type of business where you can sell online or even take phone orders, then taking only cash could limit your business’s growth opportunities. Many customers today prefer the convenience of shopping online. In addition, online sales can reach customers who live far from your store. Going cash-only means you might be missing these customers who can help your business grow.

Need For Stringent Cash Handling Policies

When it comes to money, some people cheat.

Handling cash means you will have to deal with counterfeits. Despite security features such as colored ink, raised printing, watermarks, and similar, counterfeit currency are still in circulation. In fact, the US Department of Treasury estimates that $70-200 million dollars in counterfeits could be in circulation today. If you take cash only, you and your employees who handle cash payments should be trained on how to spot counterfeits.

Like it or not, while we would like to think that our employees are honest and law-abiding, some do steal, and having a drawer full of cash can fatally tempt these unscrupulous employees. So, if you have a cash-only business, you would have to have strict cash handling policies that are enforced regularly and stringently. You might even have to invest in surveillance equipment to catch those employees who steal.

Limited Automation/More Potential For Errors

Sometimes, cash shortages are caused by inaccurate counting instead of theft. With a cash-only business, the person at the cash register must count carefully, both when taking in cash and counting back cash to give change. While this might not be difficult under normal circumstances, if you operate a business with rush times like lunch periods, having to count cash for every customer could make you more error-prone.

In contrast, if you take payment cards, only the exact amount would be processed, and you would eliminate a source of counting error.

Potential For IRS Audits

Like it or not, the IRS knows that it’s easier for cash-only businesses to underreport earnings and avoid paying taxes. Of course, not every cash-only business tries to avoid paying taxes, but enough have done so that the IRS typically audit cash businesses more often. Even if you report all your cash earnings honestly, you must carefully document all your transactions. Otherwise, it could be difficult to establish a pattern of honesty to convince the IRS that you haven’t underreported.

Other Considerations If You Want To Go Cash Only

So far, this article has focused on how going cash-only may affect the way you take in payments, but there are other considerations to take into account before you jump into a cash-only business.

Inventory & Employee Tim-Tracking Software: Even though you might only need an old fashioned cash register for a cash-only business, you might be missing out on the other conveniences of a modern point of sale system. For instance, some modern point of sale systems include inventory management software that automatically deducts items from your inventory as you make a sale. Other systems allow an employee to punch in and out to track their hours for payroll. If you use an old-fashioned cash register, these software systems would not be available to you.
Not Exempt From Paying Taxes: It is, of course, perfectly legal for you to pay your employees in cash. However, you must still deduct your employees’ income, social security, and Medicare taxes. Failure to do so will subject you to fines by the IRS.
Difficulty Obtaining Bank Loans: If you wish to borrow money to expand your cash-only business, you might have trouble borrowing from a bank. Unless you have excellent accounting records, it would be difficult for you to show a bank that you have adequate cash flow to repay the loan.Â Under those circumstances, they might decline to lend to your business.
Inability To Obtain A Merchant Cash Advance:Â In the same vein as getting a loan, some financial services companies offer something called a merchant cash advance. The advance is paid back by deducting a percentage from future credit card charges. For instance, PayPal has something called PayPal Working Capital and Square has Square Capital. If you do not process credit cards, then you cannot avail yourself of these programs. While getting a merchant cash advance is not the cheapest way to finance a business, it might be crucial to providing cash flow in a pinch.
Newer Tech Allows Coin-Operated Machines To Take Payment Cards: Finally, just because you run a traditionally coin-operated business like a laundromat or vending machines doesn’t mean that you are stuck in a cash-only world. Payment card readers designed for laundromats now exist. The newer vending machines can also take payment cards. In other words, while coin-operated businesses are traditionally cash only, you won’t have to settle for that if you wish to take payment cards as well.

Is A Cash Business Right For You?

Though we are transforming into a cashless society, for certain types of business, going cash-only might still make sense. While there will be inconveniences to you and your customers, an all-cash business is still the fastest and the easiest type of business to set up because it requires zero setup cost. For small businesses that sell items of lower cost to customers who visit in person, accepting only cash might make a lot of sense.

However, even if you prefer to take only cash, you might wish to consider adding payment cards as a convenient option to your customers. You can require that every use of the card be in excess of a certain amount, and, with mobile processors like Square, as long as you have a cell phone, you can quickly set up an account to take credit card sales even if you operate a seasonal, low volume business like a farm stand by the side of the road.

At the end of the day, with the different types of credit card payment processors available today, going cash-only is merely a choice, not a necessity. Is going cash-only a viable option for your business? If you are currently operating a cash-only business, how is your experience so far?

Find An Affordable Credit Card Processor Today

heading	Payment Depot	Fattmerchant	National Processing	Dharma	Square
	Payment Depot	Fattmerchant	National Processing	Dharma Merchant Services	Square Payments

	Get Started Review	Get Started Review	Get Started Review	Get Started Review	Get Started Review
Availability	US-based businesses	US-based businesses	US-based businesses	US-based businesses	US, Canada, UK
Serves in-store, mobile, and eCommerce	â	â	â	â	â
No early termination fee	â	â	â	â	â
Compatible with most POS systems	â	â	â	â
Rate matching / negotiableÂ	â	â	â	â
High-quality sales and customer service	â	â	â	â
Pricing model	Interchange-plus	Interchange-plus	Interchange-plus	Interchange-plus	Flat rate
Monthly fee	$49	$99	$10	$20	$0
Standard retail rates	0% + $0.15 markup	0% + $0.08 markup	0.20% + $0.10 markup	0.15% + $0.07 markup	2.75% total
Good for higher volume (over $20K/month)	â	â	â	â
Good for mid volume ($10K-20K/month)	â	â	â	â
Good for lower volume (under $10K/month)	â		â		â
	Get Started with Payment Depot	Get Started with Fattmerchant Payments	Get Started with National Processing	Get Started with Dharma Merchant Services	Get Started with Square Payments

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Each of the above companies provides excellent customer service and fair pricing.

The post Can You Really Run A Cash-Only Business? appeared first on Merchant Maverick.

“”

August 21, 2019

The Best Side Hustle Ideas You Can Start On Your Own

Has the 9-to-5 world of gainful employment left you unsatisfied, either emotionally or financially? If so, have you ever given thought to starting a side hustle?

Maybe you have talents you want to monetize but you just haven’t come up with a concrete business idea to properly tap them. Maybe you’ve been longing to start a side business for a while but just haven’t gotten to the planning stage yet. Or maybe you’re just looking to make some extra cash on the side to supplement your income. Whatever your inspiration, if you’re considering launching a side business, it never hurts to be presented with a list of ideas — and that’s what we have for you in this article!

But first, let’s establish a few things.

Ready to accept credit cards the right way for your side hustle? Try Square

Reader	eCommerce	Retail	Food Service

Free App & Reader	Square eCommerce	Square for Retail	Square for Restaurants
Get Started	Get Started	Get Started	Get Started
Free, general-purpose POS software and reader for iOS and Android	Easy integration with popular platforms plus API for customization	Specialized software for more complex retail stores	Specialized software for full-service restaurants
$0/month	$0/month	$60/month	$60/month
Always Free	Always Free	Free Trial	Free Trial

Whatâs A Side Hustle, Anyway?

When we refer to “side hustles” and “side jobs”, we’re referring to ways you can make money that don’t involve quitting your day job. After all, if your hustle fails, you don’t want to be left high and dry without the means to support yourself.

However, we’re choosing to focus on side business ideas over other methods of supplementing your income. For one thing, our focus here at Merchant Maverick is on the needs of small businesses. For another thing, many of these alternate means of support leave a lot to be desired.

A Side Hustle Doesnât Have To Mean Entering The Gig Economy

When you start a side business, you’re building something that potentially can bring you life-changing revenue in the future and open up new professional opportunities. However, the typical gig economy job cannot offer this.

Gig marketplaces often end up paying below minimum wage after you factor in the uncompensated expenses involved. For instance, Uber and Lyft drivers are on the hook for car maintenance, gas, and rideshare insurance, all of which combine to limit a driver’s take-home pay. These (and other) gig platforms also take a service fee out of what you earn for each job. The gig economy may provide opportunities for you to make some money on the side, but these opportunities tend not to be very empowering.

Likewise, you may have considered launching a blog or becoming a YouTube personality as a way to make money on the side. There’s nothing wrong with building an internet presence and monetizing it — in fact, I wrote an article a while back about how to monetize a website/blog — but it’s not what we’re focused on with this article. It’s true that with some talent and a lot of persistence, you can build your online presence up to the point where you can monetize it and generate substantial revenue. Don’t expect a lot of success in the immediate future, however.

Side Hustle & Side Job Ideas That Anyone Can Start

Let’s explore some side hustle ideas that can empower you to take your future into your own hands — all without quitting your day job.

Caregiving For The Elderly

As our population skews ever older with time, demand for caregiving services is only going to increase. If you have an affinity for the elderly and a generous heart, you could try setting up a side business caring for seniors. Of course, it helps if you have some experience in this field, as you’ll need plenty of credentials to get started — licenses, training certificates, first aid/CPR training, etc.

You’ll also need to undergo a background check and have some quality referrals. For more information, here is a list of caregiver training requirements by state.

Babysitting & Child Care

As parents work longer and longer hours to cover the cost of raising children, demand for childcare services is higher than ever. With this in mind, you might want to try opening a daycare center, either from your home or from a dedicated daycare facility.

As daycare regulations are state-specific, you’ll need to check with the relevant agency in your state to determine what training and credentials you’ll need to run a daycare facility. You’ll likely need CPR and child-specific first aid training. If you’re operating a daycare somewhere other than your home, you’ll need liability insurance, and you’ll likely need to be licensed by the Department of Health and Human Services.

If you’re running a daycare center from your home, you won’t need liability insurance to get your license, but you should consider getting some type of small business insurance anyway.

Pet Services

We are a pet-loving people. However, we also tend to spend a lot of time at the office, which means there is plenty of demand for services that care for our pets in our absence. Why not start a pet-related side hustle and cash in on this growing market?

Here’s just a sampling of the pet-related side jobs you could look into:

Pet-sitting/doggy daycare
Pet grooming
Obedience training
Dog walking
Pet photography
Dog pooper-scooper service
Pet toys/clothing
Pet treats

Licensing and certification requirements obviously aren’t going to be as stringent as they are if you’re in the business of caring for people. However, having the proper credentials for things like obedience training can make your side business more appealing to your target audience — after all, people love their pets!

Don’t be too shy to distribute flyers advertising your services to other pet-related businesses in your area.

Arts & Crafts

Here’s a side hustle you can start with some skill — and without the need to earn certifications or licenses. Sites like Etsy have shown that there exists a massive market for handmade arts and crafts.

If you have a talent for creating arts and crafts, you might have the makings of a side hustle. The most important aspect of setting up such a business is determining where you should sell your works to best target your market. Does the demographic you’re targeting attend community events and craft fairs? Or would you be better served offering your products on Etsy (or even your own online storefront)? Once you sort this out and you’ve generated a decent amount of works, you can make some money doing what you love.

Direct Sales

Did you ever get taken to a Tupperware party or an Avon party as a kid and think “hey, I could sell this stuff”? If so, you could try your hand at being a direct sales representative. If you’ve got a little salesperson in you and you want to avail yourself of some free products, it’s not a bad side hustle idea. No licensing or certification required!

It’s true that there are plenty of shady multilevel marketing (MLM) companies operating in this space. However, companies like Usborne, Scentsy, and Pure Romance are relatively reputable. But remember: becoming a direct sales representative is a good way to earn some extra money on the side, but it’s not likely to grow into something that can replace your day job.

Offer Your Freelance Services

Let’s say you want to make some money using the skills you’ve developed at your day job. Or perhaps you’ve got some latent skills just waiting to be monetized. Why not try freelancing in your spare time?

Whether your specialty is writing, graphic design, bookkeeping, tutoring, or hairstyling, there will always be a demand for freelancers. You can freelance independently, though you’ll need some solid professional connections. Alternately, you can join a freelance platform in which individuals and organizations can search for freelance workers based on their skills and experience. Just be aware that these platforms can take significant cuts of what you earn at the end of the day. Research the platform beforehand so you know what to expect in this regard.

Furniture Restoration & Flipping

Here’s an idea out of left field. Did you know you can make money finding cheap/old pieces of furniture (garage sales and Craigslist are good sources for that), restoring them, and selling them for a profit?

With a little experience and some good paints and sealers, you, too, can turn discarded pieces of furniture into items people will gladly pay for. Just make sure the furniture you’re refurbishing is structurally sound and is made of actual wood. When furniture has a quality skeleton, it’s ripe for flipping.

You can sell your restored furniture on your own — perhaps from a Facebook Business page. You can also sell at flea markets or even work on consignment.

What Do You Need To Start A Side Business?

I laid out the steps you should take when developing your side hustle idea in How To Start A Side Hustle: A 7-Step Guide, but here are some essential points:

Get some honest feedback regarding your side business idea from somebody with experience in the field in question before going through with it
Plan out how you’d like to promote your side hustle
Determine what training, certifications, and insurance — if any — will be required in the pursuit of your side business
Determine how much money you’ll need to invest upfront (and make sure that investment won’t put you in the poor house)
Don’t be discouraged if you don’t find immediate success

Software For Your Side Hustle

If you’re going to run a successful side hustle in today’s world, you’re almost certainly going to need business software. You’ll want to create a website to promote your services (and to offer ecommerce if that’s the nature of your side hustle), accounting software, and possibly email marketing software.

When preparing to run your side business, consider the following programs, each of which Merchant Maverick has tested and reviewed for business suitability. (Business software happens to be our specialty)

Wave: Cloud-based software for accounting, expenses, and invoices â the base software is free, while the payroll, payment processing, and bookkeeping components are paid services
QuickBooks Online: Cloud-based accounting software with payroll, payment processing, workerâs compensation insurance, and a custom invoice template
QuickBooks Self-Employed: Cloud-based tax software for freelancers
Square: App-based software with invoice, mobile POS, inventory, and website creation features
Weebly: Easy-to-use website builder with ecommerce support â works seamlessly with Square
Canva: Cloud-based design software â easier to use than Adobe products; doesnât require much design knowledge
MailChimp: Cloud-based email marketing software

How To Finance Your Side Hustle

Business credit cards are probably the most common means of financing a side business. You can also try obtaining a loan, though you should be wary of taking on too much debt at this stage. You don’t want your side hustle to end up causing lasting damage to your personal finances.

Here are some links to help you in your quest for financing!

The Best Business Credit Cards Of 2019
20 Tips To Improve Your Business Loan Application
How Much Money Do You Need To Start A Business?
How To Start A Pet-Sitting Business
How To Start And Fund An Online Boutique

Is It Time To Get Your Own Side Hustle?

Whether for personal fulfillment or just to earn some additional revenue, more people are attempting side hustles than ever. We put together this article to show you that side hustle opportunities extend far beyond the exploitative “gig economy”.

When done right, a side hustle can not only supplement your income, it can also develop into a bona fide self-sustaining business that can eventually replace your day job.

Now go out there and do the hustle!

Square is a great way to accept credit cards for a side hustle

Reader	eCommerce	Retail	Food Service

Free App & Reader	Square eCommerce	Square for Retail	Square for Restaurants
Get Started	Get Started	Get Started	Get Started
Free, general-purpose POS software and reader for iOS and Android	Easy integration with popular platforms plus API for customization	Specialized software for more complex retail stores	Specialized software for full-service restaurants
$0/month	$0/month	$60/month	$60/month
Always Free	Always Free	Free Trial	Free Trial

The post The Best Side Hustle Ideas You Can Start On Your Own appeared first on Merchant Maverick.

“”

August 20, 2019

How To Start A Side Hustle: A 7-Step Guide

So you’ve had thoughts of starting your own business for a while now. Unfortunately, life keeps getting in the way. You’ve got bills to pay, a job to perform, and relationships to maintain. Yet you remain unsatisfied by working for “the man” and don’t want your entrepreneurial dreams to wither on the vine.

Your discontent may grow to the point where you’re ready to just ditch your day job and go all-in on your business idea, throwing caution to the wind. While I don’t want to throw cold water over your entrepreneurial dreams, you probably shouldn’t go about following your bliss this way! After all, most new businesses fail, and many successful entrepreneurs have a failed startup (or three) in their past. If you quit your job and bet the farm on a startup that fails, you won’t be in a position to try again — you’ll be too busy picking up the pieces of your life.

The truth is, many successful companies begin as side hustles. Starting small but allowing room for growth gives you a chance at ultimate success while ensuring that if things don’t go according to plan and your side business fails, you’ll still have your primary source of income, setting you up to try your hand at entrepreneurship again.

Let’s go through the seven steps to follow when starting a side business while keeping your day job!

Ready to accept credit cards the right way for your side hustle? Try Square

Reader	eCommerce	Retail	Food Service

Free App & Reader	Square eCommerce	Square for Retail	Square for Restaurants
Get Started	Get Started	Get Started	Get Started
Free, general-purpose POS software and reader for iOS and Android	Easy integration with popular platforms plus API for customization	Specialized software for more complex retail stores	Specialized software for full-service restaurants
$0/month	$0/month	$60/month	$60/month
Always Free	Always Free	Free Trial	Free Trial

Step 1: Find A Great Idea

When considering how to start a side hustle, think about the skills you’ve picked up at your current job. You may well have acquired marketable skills in your current position that could form the basis for your new business. With a set of monetizable skills, you can always offer consulting services to those seeking the knowledge you already possess.

Of course, if you’re not passionate about your current job and what you’ve been doing there, you should probably try something else. If your side business doesn’t involve something you love to do, you’re less likely to maintain the commitment you’ll need to see it through. Besides, who wants to start a business doing something that doesn’t bring joy or satisfaction?

As you run through ideas, consider whether or not you know anybody with experience in the field in question — somebody who could possibly recommend your services to others, or perhaps somebody who can give you honest feedback about the viability of your idea for a side business. Whatever it is you want to delve into, you’ll want to get some measure of validation beforehand from people with expertise in the subject.

Looking for some specific examples of businesses you could start? Check out our piece on side hustle ideas!

Step 2: Make A Plan

When laying out a plan of action, commit to setting aside a certain amount of time per week that you can devote to building your side business. This will almost certainly involve some tough choices. If you spend lots of time each week playing video games or reading your Twitter feed, those are obvious places to cut back. However, if you truly want your side hustle to grow and thrive, you’ll likely have to make some harder cuts. Going out with friends, going to the gym, taking a morning jog before work, even sleep — these are all things you may have to reduce if you want to give your business the attention it will need.

Hey, nobody said this was going to be easy!

Depending on the type of side hustle you’re considering, look into the requirements for running a business in your chosen field. Consider whether you’ll need any certifications to establish your qualifications or any insurance for protection. On that last point, check out our article detailing the types of insurance you might need when launching your business.

If you’re considering starting a freelance business, you may want to look into accounting software that can help you with creating contracts, such as AND CO. I should note that Square provides template contracts, free of charge.

Step 3: Seek Financing

Before your side hustle becomes profitable and self-sustaining, you’ll need to cover the costs of getting it off the ground. Inventory, software, a website — these things all need to be financed. You’ll need to set a budget and seek out funding sources.

Getting a business credit card is perhaps the most common means of financing startup expenses. You can also try taking out a loan. If you do, you may find it easier to obtain a personal loan (which can be used for business purposes) than a bona fide small business loan. Just be wary of taking on too much debt at this stage. You’ll have to pay off any debt incurred, lest your business foray result in lasting damage to your personal finances.

Another potential source of capital for your side hustle — a resource more commonly tapped than most entrepreneurs like to talk about — are your friends and family. Again, make sure you can pay them back — you don’t want a business failure (remember, failure is incredibly common in this arena) to imperil your lifelong personal relationships.

One thing that will greatly simplify your taxes and your accounting is to keep your personal and business financials separate from one another. If you’re able to get a loan, consider setting up a separate business bank account for the funds obtained and using the funds exclusively to fund your side business. Separating your personal and business finances is important if you want to avoid getting audited, among other things.

For more on financing a side hustle, check out the following links:

20 Tips To Improve Your Business Loan Application
The Best Business Credit Cards Of 2019
How Much Money Do You Need To Start A Business?
How To Start A Pet Sitting Business
How to Start And Fund An Online Boutique

Step 4: Find The Right Software

Regardless of the sort of side business you intend to start, you’re almost certainly going to need some business software to keep things running smoothly. It’s exceedingly difficult to run a modern business without accounting software, and you’re definitely going to want to start a website to promote your side hustle and advertise its services (and to offer ecommerce if that’s what your business involves).

Other software you may find useful and necessary includes design software and email marketing software. Thankfully, business software is our specialty. When preparing to run your side business, consider the following programs, each of which Merchant Maverick has tested and reviewed for business suitability.

Wave: Cloud-based software for accounting, expenses, and invoices — the base software is free, while the payroll, payment processing, and bookkeeping components are paid services
QuickBooks Online: Cloud-based accounting software with payroll, payment processing, workerâs compensation insurance, and a custom invoice template
QuickBooks Self-Employed: Cloud-based tax software for freelancers
Square: App-based software with invoice, mobile POS, inventory, and website creation features
Weebly: Easy-to-use website builder with ecommerce support — works seamlessly with Square
Canva: Cloud-based design software — easier to use than Adobe products; doesn’t require much design knowledge
MailChimp: Cloud-based email marketing software

Step 5: Launch Your Business

This is when all your preparation comes to fruition. This is the time to kick your promotion into overdrive. Get everyone you know to like your Facebook Business page and follow your Instagram account, take your website live, and try to solicit referrals and reviews through all your promotional channels. If you’ve built an email list, use it to promote your launch. If possible, include a coupon or some other promotional tool in your email. Depending on the nature of your business, you could even offer some kind of special membership to your initial customers.

You’ll want to leverage every contact you have in the field and convince them to spread the word about your new project. Additionally, look for online communities to join to gain visibility for your business. Naturally, to be accepted in such a community, you don’t want to just promote your business relentlessly. Establish yourself as someone who is helpful and genuine, not someone just out to make a quick buck!

If there’s any aspect of your business that you don’t feel equipped to take on, delegate the work to an employee (or business partner, or contractor). Focus on where your strengths lie.

Step 6: Prepare for Setbacks

As I said in the introduction, running a successful business — on the side or not — is quite difficult. So much so that the vast majority of new businesses no longer exist after five years. As such, don’t be discouraged if your side hustle doesn’t find immediate success.

It’s quite common to experience cash flow issues with a new side business. Here are a few articles containing helpful information on the subject:

What Is Cash Flow?
How To Calculate And Analyze Business Cash Flow
10 Strategies To Improve Cash Flow

Step 7: Evaluate & Carry On

At a certain point, it should become easier to see what’s working and what isn’t for your side hustle. Ideally, your “hustle” will grow to the point where you can afford to tell your boss to take their job and shove it (or just politely give your two weeks’ notice). To do that, always be on the lookout for ways your side business can evolve and adapt to modern business realities as you gain a greater understanding of the business world.

Maybe there’s a market you haven’t tapped that you could pursue. Maybe there’s a new product idea you can make real. There will likely be opportunities to take your side business to the next level. Just hold off on quitting your day job until your business cash flow approaches or matches the current income from your day job.

A Side Hustle Is Still A Business

Your side hustle may not be your primary focus. After all, you’ve still got bills to pay and health coverage to maintain, so you don’t want to endanger your day job in the pursuit of a dream. Nonetheless, the same elements that translate to a greater likelihood of business success apply regardless of whether your business is your part-time or full-time endeavor.

Bear in mind that it is entirely possible to launch a side business doing what you love and watch it ultimately grow into something bigger. You don’t need to be some annoying Silicon Valley whiz kid rolling in VC cash to build a successful company. Just keep these tips in mind, and you never know — your side hustle just might turn into a thriving company that actually does give you the freedom to quit your day job. And if it fails, well, at least you kept your day job, giving you a financial base from which to give entrepreneurship another try. Plenty of successful entrepreneurs have had businesses fail, so don’t get discouraged if things go south.

Now get out there and hustle! Here are some ideas to get started.

Square is a great way to accept credit cards for a side hustle

Reader	eCommerce	Retail	Food Service

Free App & Reader	Square eCommerce	Square for Retail	Square for Restaurants
Get Started	Get Started	Get Started	Get Started
Free, general-purpose POS software and reader for iOS and Android	Easy integration with popular platforms plus API for customization	Specialized software for more complex retail stores	Specialized software for full-service restaurants
$0/month	$0/month	$60/month	$60/month
Always Free	Always Free	Free Trial	Free Trial

The post How To Start A Side Hustle: A 7-Step Guide appeared first on Merchant Maverick.

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August 16, 2019

Everything You Need To Know About Small Business Payroll

Payroll is a daunting component of any business, and many small business owners admit frustration with managing their payroll documents. But payroll is necessary. Not only is it important that you pay your employees correctly, but making a mistake on payroll is messy, complicated, and could impact taxes. If you’re looking for a quick and easily digestible introduction to payroll, you’ve come to the right place. Let’s delve on in.

What Is Payroll?

If you have employees, you pay them a wage for their work; that’s just a basic fact of life. Payroll is defined as the regular payment of wages to employees, and it includes withholding the correct amount for taxes, insurance premiums, or retirement plan contributions. Payroll can be complicated and unwieldy with technical minutia, but managing payroll is a legal requirement, so don’t try to skimp on understanding the basics.

In essence, with all payrolls there are dual systems at work — there is the money allotted to employees as wages and there is money that is withheld for payroll taxes. As a small business owner, you are responsible for managing those withholdings. So, when payday rolls around, you give your employees a check that has the appropriate amount withheld for taxes, and when tax time arrives, you provide employees with statements of income (more on this below) and pay the government their share of the booty. That’s payroll, in a nutshell.

The Components Of Payroll

Payroll is broken down into several steps. As the small business owner, you are responsible for providing your employee the correct wages and for withholding state and federal taxes. Your records for payroll need to be clear and accurate, and whether you do these calculations by hand or use payroll software to run the numbers for you, it’s important to understand how payroll works. Anything dealing with money and taxes is fundamentally crucial to your business, and it’s important to your employees, too. A functional payroll sends a message of respect and stability to the people you employ.

Before you set up a payroll system, here are the payroll terms and the concepts you should be familiar with.

Employee Details

What does it mean when someone runs payroll? It can mean running the monthly wage reports for employees, including their withholdings. And it can mean organizing the financial documents related to wage and withholdings for the entire fiscal year, as well. Payroll can also simply mean the amount you pay to employees and the government every year.

Your employees work for you for a certain amount of money, and processing the money you owe them is payroll. In order to set up a payroll system for your business, you will need to acquire some information from your employees. Here’s everything you must have to set up your payroll system:

Your company’s legal name or DBA (Doing Business As)
Your Federal employer identification number (EIN)
State tax withholding ID number
State unemployment tax ID number (SUI)
Local tax ID numbers
Your state unemployment tax rate information
Details on the pay rate for each employee
Personal information for all employees, including
- Name
- Address
- Social security number
- Tax filing status
- Information on deductions and contributions

Once you’ve gathered this information, you can set about calculating the appropriate withholdings and deductions in order to be compliant with the law.

Salary & Wages

Money, money, money, money! Look, wouldn’t it be amazing if each of your employees was independently wealthy and believed in your business enough to work for free? I mean, sure, as a small business you may temporarily use your friends, but if you have someone working for you day after day, then put that person on the payroll. It might feel easier to pay a handful of employees under the table, but it’s both illegal and hurtful to your bottom-line. Here are some salary and wage terms to understand:

Gross Pay/Gross Earnings

Gross pay is the amount of money your employee has earned before any deductions. This includes commission, bonuses, and other payments.

Net Pay

Net pay is the amount of money your employee has earned after deductions and taxes are withdrawn. This can also be called “take-home” pay.

Salary

This is the accumulative yearly wage for employees. That salary is then divided up and distributed on a set pay schedule. The payment schedule could be weekly, bi-weekly, or monthly. (A salaried employee has set earnings per month versus an hourly employee.)

Hourly Wages

This is the amount of money paid per hour to employees who are not receiving a set salary. Freelancers, contractors, and all hourly employees are paid per hour. In a payroll system, the hourly rate is set for employees and is calculated when payroll is run.

Overtime

If an hourly employee works more than 40 hours a week, any additional hours you approve over that is considered paid overtime. An overtime wage is a set rate and is subject to tax deductions. Overtime calculations can become complicated depending on when payroll is run, so if you have quite a few employees who earn overtime, factor that into your payroll choices.

Contract-Based Work

Someone working for your business on contract has a specific pay schedule related to that contract. As a 1099-employee, a contract is based for a specific amount of time and ends on an agreed-upon date. As an employer, you do not withhold taxes from a contract employee — he/she is responsible for their own withholdings.

Bonuses

This is an amount of money rewarded to an employee for good performance. While it may be a one-time payment in addition to a salary, all bonus money is subject to taxes.

Tips

A tip or gratuity is an added amount of money received by employees for a job well done. Some payroll systems allow employees to keep track of their tips, as those wages are taxable income. Having a system to account for tips is important to your business and maintaining compliance.

Commissions

If you are a sales-based company, your employees might earn money off of each sale they make, and this is called a commission. Even if your employees are commission-only, the IRS still considers commissions as supplemental income and it should be taxed at the regular rate.

Time-Off

Earning time-off is an important part of being an employee. Time off can appear in various forms; family and medical leave, paid vacation time, sick leave, and personal time. Your small business needs time-off policies and a way to calculate those hours separately from paid work hours. Your payroll system will also include information about your business’s time-off policies and calculate adjustments to a paycheck for earned time off. An automated payroll system can calculate earned time off for your employees — making it easy to put available vacation hours on pay stubs.

Paid Time Off (PTO)

This is a set amount of hours per year your employee has to take a paid time away from work. Some companies provide a block of hours employees can use toward sick, vacation, or personal days. Under federal law, you are not required to provide paid time off to your employees, but happy and healthy employees are good for business, so offering PTO is often in the best interest of employers (and can be a huge deciding factor for an employee’s job decision).

Set up a policy for paid time off and communicate it clearly to employees. What happens to unused time at the end of the year? Are employees paid a regular or amended rate for paid time off? Once you’ve made these decisions about time off, then you can find a payroll system that automates the process for you.

Vacation Days

While Paid Time Off (PTO) and vacation days can be used interchangeably, they are different. Vacation time by definition is time your employees can take and to be totally free from work duties without restrictions. Business policies regarding vacation will vary. Make some choices about your vacation policies: do employees need to declare vacation by a certain time? How many hours of vacation are employees given a year? How are vacation days tracked?

Sick Days

Humans get sick. Humans make little humans who are sometimes sick and can’t go to school or daycare. Illness is a fact of life and business owners need to prepare for the inevitable with a sick day policy. Bonus: encouraging your employees to stay home when they are ill protects your business from sickness spreading! Check with your state to see if there are state-mandated sick leave policies. Note: At the time of this article, 13 states/territories have paid leave laws: Washington, Oregon, California, Arizona, Michigan, Connecticut, Maine, Maryland, Massachusetts, New Jersey, Rhode Island, Vermont, and Washington DC.

Other Policies

In addition to sick leave and vacation leave, you may want to consider offering other leave options to employees. Personal leave is scheduled time for your employees to use for adulting purposes (doctor appointments, car check-ups, parent-teacher conferences, school meetings, emergency plumbing disasters, mental health). Also, developing a plan for family leave/maternity and paternity leave is a must. Brainstorm the ways an employee might need to be absent and have firm policies in place for those occasions.

Benefits

Employees care about benefits. Second to salary, benefits matter when employees choose where they want to work. Sometimes small business owners think they can’t afford to offer benefits to employees, but they actually can’t afford to risk the loss of employees by not offering benefits. The value far outweighs the potential cost.

So what are benefits? These are the extras a small business provides for their employees — health care, dental care, life insurance, or a retirement plan. As a small business, depending on your size, you might be required to provide some of these benefits to full-time employees, so as always, check the laws in your state. Here are a few benefits that may be legally required:

Time off to vote or serve in the military
Worker’s compensation
Pay state and federal unemployment taxes
Comply with FMLA (Family Medical Leave Act) laws

Retirement Plans

You are not legally required to provide a retirement plan for employees; however, should you provide a retirement incentive, there is marked improvement in employee retention and happiness. There are also tax credits and incentives for small business owners who provide retirement benefits. The options for retirement benefits are tiered and varied; for companies with a small number of employees, retirement options like a Simple IRA or a Simple 401K are easy to implement, and many payroll software systems can help with employer contributions and matching.

Health Care

Do you need to provide health insurance to your employees? Possibly! The current legal requirement is this: If your business is considered an Applicable Large Employer (ALE) with 50 or more full-time employees for more than six months out of the year, then you will need to provide your employees with health insurance as a legal requirement of the Affordable Care Act.

If not, then health care benefits are a choice! (But a good choice! And one that leads to happy employees, higher retention rates, and a thriving and healthy community.) Need to know more about health insurance, even if you are a small business with only one employee? We have you covered. Check out ourÂ Ultimate Guide to Small Business Health Insurance or our post on How Health Insurance Works for One Employee.

Life Insurance

As a small business, you may offer life insurance to your employees. Group life insurance is an inexpensive and easy way to communicate to your employees that you value them. (Also, did you know that you can even singularly insure a really important employee? Like, if your business won’t function without a particular human being…insure that human! It’s called Key Person Insurance. Check it out.)

Fringe Benefits

Fringe benefits mean any additional supplement to income that you may offer your employees. They include the benefits listed above, but also include many other types of assistance you may want to offer. Some companies provide access to a company car, rewards for healthy living, transportation vouchers, discounts for schooling, employee discounts on merchandise, technology grants, and paid career advancement conferences. Most fringe benefits are tax-free, but it’s important to check with a tax expert.

Tax Deductions & Withholdings

The most important thing, equal to paying your employees, is paying the government. Managing federal and state tax withholdings is a crucial component of payroll. It is your responsibility as the small business owner and employer to understand the tax law and the federal tax rates (you, or a software program, or a hired accountant). Your employees, when hired, will fill out and send the proper forms to the Internal Revenue Service (IRS), and that paperwork along with current tax rates will tell you how much to withhold for payroll taxes.

We know it’s a lot to take in, but before you start hyperventilating, we’ve broken down the tax withholding basics below.

Federal Income Tax Withholding

This is the amount of money withheld from an employee’s paycheck each month that goes to pay federal income taxes. The federal rate for income tax withholdings changes depending on your income level and your employee’s allowance preferences (as reflected on their W-4s).

State Income Tax Withholding

This is the amount of money withheld from an employee’s paycheck each month that goes to pay state income taxes. As an employer, you are required to calculate how much to take for state and all local taxes.

Social Security

The social security tax is a federal income tax that affects all employees, no matter what. The tax rate for social security depends upon a formula that takes inflation into account. In 2019, the current rate is 12.4 percent which accounts for a 6.2 percent employee and 6.2 percent employer contribution. (Unless you make over $200,000 a year, then you gotta pony-up an extra .9 percent.) Combined with Medicare, this is what is referred to as Federal Insurance Contributions Act (FICA) Taxes. And FICA taxes are also called payroll taxes.

Medicare

Along with social security, Medicare is considered a FICA Tax which is considered the cost to the government for employment. The current Medicare rate is at 1.45 percent for all employees, and there is no cap. You will collect this money as part of the paycheck withholdings and send it along to the IRS throughout the year.

Payroll Tax Forms

You cannot create a payroll system without having the right tax documents from each employee. (Cue Roz’s constant battle-cry for paperwork in Pixar’s Monster’s Inc.). Our current digital landscape allows for the ease of sending and receiving tax forms via the internet, so we can cut down on the “paper” part of all this paperwork.

Filing payroll? Here are the forms required by law that you/and or your employees must fill out:

W-2: Every employer is required to send this document to each employee and the IRS. This form is a statement of all wages earned and all taxes withheld during the previous year.
W-4: This form is filled out by employees and communicates how much tax they’d like withheld from their paychecks. You will need to know their withholding allowances in order to correctly run payroll and take out the right amount of money.
1099: This form is for people who worked under contract or freelancing for your business and do not earn a regular salary. This form is for tracking miscellaneous income, or extra income, a person may earn. Money sent to a 1099 employee does not have taxes withheld, which means the burden of paying taxes moves away from you as the temporary employer.
Schedule C: If you are an independent contractor or a sole proprietor of a business, you will need to fill out a Schedule C profit/loss report and file it with the IRS. A profit-loss statement is also called an income statement and its purpose is to help calculate your self-employment tax. Under the new tax laws, you will file a Schedule C form with your 1040 form.
1-9: This form is required to verify the identity and employment availability of your employees. When you hire someone and onboard them to your business, every single new hire needs to fill out this form. After your employee fills out the first part, you as the business owner need to fill out the second part. Since this is used to establish identity, your employees will need to send you formal identification: a current US passport, a green card or alien registration card, birth certificate, social security card, among others.
940: When you run payroll, you will pull out and withhold certain taxes to send to the federal government. One of those taxes is the Federal Unemployment Tax. That money is used to compensate workers who are unemployed and are qualified to receive assistance.Â You will need to fill out a 940 form every year to declare your payroll: how much your employees earned and how much money you pulled for your unemployment taxes.
941:Â This important payroll tax form tells the federal government how much you paid your employees and how much money you withheld to pay for income taxes, social security taxes, and Medicare taxes. You will file the form and then send the IRS the money you withheld from employees when you ran payroll.
944: If you are a big company running payroll, you will pay your payroll taxes every quarter, and this form doesn’t apply to you. However, if you are a very small business and your total withholdings for payroll taxes are less than $1000, then you can file a 944 form once a year.

Processing Payroll

The phrase processing payroll means several things. We’ve already discussed the biggest decisions regarding setting up payroll. To process payroll means all of these things:

Determining your employee’s wages and salaries
Determining an employee pay schedule
Calculating payroll taxes
Withholding payroll taxes from employee paychecks
Delivering paychecks with the proper withholdings
Submitting taxes to the government
Dispensing paperwork to employees via W-2 or 1099s.

Payroll is not a single step, but a collection of steps that lead to paid employees and a paid government — keeping the people you employ happy and the tax gods happy. Here are the factors to consider in order to set up and process payroll:

Who Is On Payroll?

You’ve hired an employee. Yay! Now, you need to pay that employee. Your payroll will include any W-2 and 1099 employees you pay regularly. But not everyone who works for your business will need to be processed through a payroll system, so who does get paid via payroll?

Employees

Whether or not someone is considered an employee has a lot to do with whether or not you control his/her workload, control his/her paycheck, and control your relationship. (If you have control over another human…you’re the boss!) If you can say yes to any or all of those questions, then that person is your employee and you have legal requirements related to paying that individual. If you’re super confused about whether or not you are someone’s boss, you can fill out an SS-8 form with the IRS and they’ll help you figure out the classification.

Contractors

A contractor is not an employee. They are a freelancer helping your business for a set time or a set project, and are paid according to their contract. Contract employees are responsible for withholding their own taxes! When you run payroll for contractors, pay them their wage and your part is done. (Easy peasy.)

Pay Schedules

Now it’s time to make important choices about how often your employees will get paid. Twice a month? Once a month? Once a week? Here are the options, challenges, and benefits of each.

Weekly

On a weekly payroll schedule, employees would receive a paycheck each week for a total of 52 pay runs per year. Some employees like being paid weekly; it can be good for monthly budgeting. However, running payroll every week can be a time-consuming practice for you or your accountant. Many payroll companies will charge you each time you run payroll, so a weekly payment schedule might seem nice, but it’s expensive and hard on the people in your accounting department (or if you don’t have an accountant: you).

Bi-Weekly

A bi-weekly paycheck would arrive every two weeks, regardless of how that week fell on the calendar. Bi-weekly payroll doesn’t always even out since every month is not exactly four weeks. With bi-weekly payroll, there’s a total of 26 pay runs per year (which means that most months, employees will receive two paychecks per month, but twice a year they will receive an extra check). This means the paychecks may appear to come inconsistently and some people find this harder to rely on.

Semi-Monthly

A semi-monthly paycheck arrives twice a month, usually on a set date (for example: the 1st and the 15th; or the 15th and the end of the month). Unlike bi-weekly payroll, semi-monthly payroll has a total of 24 pay runs, meaning employees will get paid twice a month no matter what. Semi-monthly is the best for employees who earn a salary but is cumbersome for calculating overtime.

Monthly

On a monthly payroll schedule, employees receive a paycheck once a month. Some employees don’t like the once a month payments, but with only 12 pay runs a year, it is the easiest on the person running payroll. The end of the month corresponds with payments to the IRS, so it can be simple to withhold, collect, and report.

Pay Stubs

One of the components of payroll is giving each employee a pay stub. This is a formal piece of communication between you and your employee about how much they earned and how much you withheld. Each pay stub also includes all the year-to-date figures. The type of information required on a pay stub varies by state.

Payroll Payment Methods

When the time arrives to give your employees their paycheck, you have several methods to choose from. You may offer payment choices to your workers, or you can choose for them. Here the three most popular options you can use to distribute your payroll:

1. Payroll Checks

You can give your employees a paycheck. Manually filling out handwritten checks might take a long time every payroll period, but there are automated ways to print checks, too. (Some require a special printer, so be sure to talk to some payroll experts about your needs.) A check has several benefits: employees don’t need a bank account and there are low distribution costs.

2. Payroll Card

A payroll card is similar to giving employees a preloaded credit card — actually, that’s exactly what it is. Every pay cycle, you put money on a payroll card and employees can use the payroll card wherever debit/credit is taken, or pull the money out as cash. These payment cards are gaining in popularity. This is another method that doesn’t require a bank account.

3. Direct Deposit

If you don’t want to mess with checks and cards, direct deposit into an employee’s bank account can be the way to go. This is the most common way employers pay their workers, and it’s easy: if you have an automated online payroll system, linking a direct deposit creates a seamless payroll. However, it can be expensive to set up and not all employees may have a bank account.

How To Run Payroll

Alright, now the nitty-gritty part of this process. You know what kind of employees you have, they’ve filled out their paperwork, you’ve decided to pay them bi-weekly (or, you know, whatever), you’ve learned about rates of withholding and benefits, and you know how the employees want to receive their money. Bam! You’re on a roll! But now what? How do all those numbers and choices combine into a seamless process that won’t eat up major hours of your time?

Here are the options you have as an employer for calculating and processing payroll.

Manually Calculate Payroll

Manual payroll might be your only choice, financially or otherwise, and that’s okay. If you have only a handful of employees, it could be more cost-effective to do those calculations by hand. If you have a salaried employee, you’ll take their salary, divide it up among the pay periods, and withhold the necessary taxes. For hourly employees, you will examine their time cards and make the calculations based on their hours and rate of pay.

Manually running payroll is cost-effective for your small business and could be a good choice if you feel comfortable and confident working with numbers, and you only have a handful of employees.

For example, you have an employee named Jim. Jim’s a salaried guy making $50K a year, with no overtime. Jim gets paid every two weeks, so his salary of $50K is divided up across 24 payments. 50,000/24 = $2083.33 is his GROSS pay every two weeks. You will still need to withhold payroll taxes though. You can use the IRS’s tax withholding percentages to help you calculate this.

According to the IRS, for a bi-weekly gross pay of $2,083.33, federal withholdings are $267.00, social security withholdings are $129.17, and medicare is $30.21, which means you’d give your employee a NET amount of $1717.37 on their bi-weekly paycheck.

How did I calculate that? Well, I did spend some time with a calculator and the federal rates we discussed above. Then I checked my numbers against a payroll software program. Was I right? Yup! Did the software calculate it faster and give me more confidence? Well, also, yup. So, if manual calculation doesn’t get you feeling all fun and loose, there’s a software for that.

Payroll Software

Business software has come a long way in recent years, and payroll software is no exception. There are tons of online, easy-to-use payroll solutions. The benefits of payroll software include built-in time tracking and payroll calculations, expert help from customer support teams, peace of mind, and saved time.

Merchant Maverick has already reviewed a few payroll software providers, including Gusto and Paychex. These comprehensive payroll reviews cover pricing, features, customer support, user feedback, security, and more so you can make an informed decision about the right payroll software for your business.

Outsource Payroll

The last option is to hire an accountant or a payroll outsourcing company to manage your payroll from start to finish. While a payroll program can do the calculations and manage your tax tables, as the small business owner you might still be the singular responsible person for managing payroll. By outsourcing the entire process, you can rest assured that professionals are handling the numbers, and it doesn’t have to be a monthly or bi-weekly chunk of time.

How To Choose Payroll Software

So, you’ve decided that as much as you enjoyed your high school math classes, you want to trust in computer calculations, and you want to check out available payroll software. There are many options at your fingertips. All those options can also make finding the right payroll software a bit overwhelming. Do you need bells and whistles? How much can you anticipate to pay? What if you make a mistake?

Ask yourself the following questions before you start to look at programs:

How many workers do I need to run payroll for?
Do I have mostly salaried employees or contract employees?
Do I provide a benefits package?
Do I have a payroll manager who is comfortable with the legal requirements of payroll?
How much am I willing to pay to outsource the work?

Payroll Software Features

Each software program that helps you with payroll comes equipped with different features. Only you will be able to know what features are needed most for your company. To start, here is a list of all the basic features a good payroll software should have:

Payroll Processing Abilities: Maybe this should go without saying, but your software needs to calculate and process your payroll, whatever that looks like. Look for integration with timekeeping software, ease of use, etc.
Tax Calculations: Since this is the trickiest part of payroll, it’s important to have software that you trust to manage and perform automated calculations. There’s less human error and the system will help you file those taxes, too.
Direct Deposit: Automate everything and make sure when you run payroll that your software has the capabilities to work directly with banks.
Time & Attendance Tracking: Some payroll software can also be used for timesheets and keeping track of employee hours. If you have many hourly employees, this might be a nice integration tool so you don’t have to import hours from a different program.

Payroll Training & Support

When shopping around for a payroll system that works for you, make sure that it comes with real-person training and help. Should you get stuck, you’ll want to make sure there is someone who understands compliance issues available to help you. If your business doesn’t have an accountant, then purchasing software that comes with human support should be a high priority. Payroll can be complicated, daunting, overwhelming, and there are many opportunities for human error.

But there are also many online support and training opportunities if you want to learn it on your own or pay an employee to become payroll certified.

Cost Of Payroll Software

As with the costs of all things, the monthly number differs depending on need. There are some payroll systems that start as low as $10 a month and no additional fees per employee; however, some programs charge a fee per employee (in the $4-5 range). And some payroll software companies can charge up to $200 a month. With that much of a variance between programs, it’s important to set a budget and decide what features are the most important for your business as you move forward.

Getting Started With Payroll

Paying your employees is not an optional part of running a small business. You need to find a payroll system and a method of running payroll that adds quality to your business, not chaos. Compliance, necessary HR onboarding, and running payroll during tax season are all components of a small business that might make you want to go take a long nap and turn your brain off if you have a tendency to want to sleep for years when life gets overwhelming (…or is that just me?), but in today’s digital world payroll is easier than ever.

Research and understand what you need, know your business, and take the leap into organizing your systems with seamless payroll. The IRS and your employees will thank you.

The post Everything You Need To Know About Small Business Payroll appeared first on Merchant Maverick.

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What To Look For In Good Invoicing Software

Zoho Invoice

Invoice Ninja

FreshBooks

Bill.com

Square Invoices

Harvest

Invoice2go

Choosing The Best Invoicing Software For Your Business

What Does A Swipe Card Reader Do?

How Swipe Card Readers Work

Credit Card Swipers Don’t Protect You From Fraud

How Do You Get A Free Credit Card Reader?

Why You Should Be Wary Of Free Credit Card Reader Offers

How To Find The Best Free Credit Card Reader

Swift B200 From SwipeSimple

Square Magstripe Reader

Shopify Chip & Swipe Reader

PayPal Chip & Swipe Reader

Don’t Be Fooled By The Promise Of A Free Card Reader

What Is A One-Page Business Plan?

The Basic Structure

Should You Use A One-Page Business Plan?

What You Need To Create A One-Page Business Plan

Business Overview

Objectives

Experience

Target Market

Your Competition

Financial Summary

Marketing Strategy

One-Page Business Plan Template [Download]

You’ve Created Your Business Plan. Now What?

How Banks Transfer Money Between Accounts

What Is An ACH Payment?

What Is A Wire Transfer?

How Secure Are ACH Payments & Wire Transfers?

Dealing With Disputes For ACH Payments & Wire Transfers

Should You Use ACH Payments Or Wire Transfers?

Why Would You Want A Cash Business, Anyway?

The Best Cash Businesses

Advantages of Going Cash Only for Payments

Lower Costs & Overhead (No Processing Fees)

No Risk Of Funding Holds

Simplified Accounting

Disadvantages Of Going Cash-Only for Payments

Lost Customers

Few Growth Opportunities

Need For Stringent Cash Handling Policies

Limited Automation/More Potential For Errors

Potential For IRS Audits

Other Considerations If You Want To Go Cash Only

Is A Cash Business Right For You?

Whatâs A Side Hustle, Anyway?

A Side Hustle Doesnât Have To Mean Entering The Gig Economy

Side Hustle & Side Job Ideas That Anyone Can Start

Caregiving For The Elderly

Babysitting & Child Care

Pet Services

Arts & Crafts

Direct Sales

Offer Your Freelance Services

Furniture Restoration & Flipping

What Do You Need To Start A Side Business?

Software For Your Side Hustle

How To Finance Your Side Hustle

Is It Time To Get Your Own Side Hustle?

Step 1: Find A Great Idea

Step 2: Make A Plan

Step 3: Seek Financing

Step 4: Find The Right Software

Step 5: Launch Your Business

Step 6: Prepare for Setbacks

Step 7: Evaluate & Carry On

A Side Hustle Is Still A Business

What Is Payroll?

The Components Of Payroll

Employee Details

Salary & Wages

Time-Off

Whatâs A Side Hustle, Anyway?

A Side Hustle Doesnât Have To Mean Entering The Gig Economy