Money makes the world go round
Finding the most efficient way to receive, pay and transfer cash can make a huge difference to the smooth running of your business. Valerie Khoo reports.
Any business survives and thrives on money. And the way that money is transferred and transacted can have a huge impact on your business. Inefficient transaction systems are rife with risks – not just as a security risk but as a potential obstacle for growth.
If you don't have an efficient way to make and keep track of payments you won't have a clear financial picture of where your money is going. And if you don't provide simple and convenient ways for customers to make payments, you risk alienating them or losing potential sales.
The two main cash flow areas SME owners should review are: making payments or transfers and receiving money.
Making payments and transfers
Most businesses assume that a cheque account and access to internet banking is all you need. However, there are a number of other options to consider if you want to streamline your payments and keep a firm control over the cash that's going out of the business.
Cheque and deposit accounts
Review your average bank balance and see if it might be more suitable to find a cheque account that offers higher rates on minimum balances. Similarly, if you have surplus funds, consider transferring the funds to a high-interest bearing account that still allows you easy access to your funds when you need it. Consider if you need a separate account to provide for tax payments or planned expenditure in the future.
Separating the funds can help you budget and ensures this money is set aside. For example, NAB's GST Business Offset Account allows you to provide for GST payments and enables direct electronic remittance of GST obligations.
Foreign currency accounts
If you trade with other countries, consider running these transactions through a foreign currency account. While it's still possible to run international payments and receipts through an Australian dollar account, a foreign currency account minimises exchange rate losses and clear tracking of amounts paid, while allowing you to choose when to convert foreign currency to Australian dollars.
Business credit cards
Many SMEs empower employees to make purchases for the business. If the purchases are made on personal credit cards, employees need to fill in individual expense reimbursement forms and make a claim from the business. For a business with multiple employees this can turn into an administrative nightmare, with multiple expense reimbursements being submitted at various points of an accounting cycle. It makes sense to consolidate business expenses paid for by credit card with one dedicated for business use.
Internet and phone banking
While most people are now familiar with internet banking, many don't realise that you can choose internet banking solutions that can interact with your accounting software. For example, National Online Business enables SMEs to import and process payroll files and stop cheques, allowing greater control over cash. It can make regular or scheduled payments, which automates frequent processes such as regular salary or rental payments. It can also export information in common formats and even process payments urgently.
Receiving money
Typically, this refers to customer payments. The issue here is to make the payment process as simple and easy and possible for the customer. These days customers are spoilt for choice. They can order and pay for goods online, they can pick up the phone and pay by credit card, electronically transfer funds, write a cheque – the list is endless. If you aren't providing your customers with a convenient way to buy, you could be giving your competitors an edge.
Accepting credit cards
Gone are the days when the standard question to customers was: "Cash or cheque?" In an increasingly cashless society, many customers want the convenience of paying by credit card and debit card. Apart from providing this basic service, it's important to choose the right type of credit card facility.
The questions you need to ask are:
- Will your customers be paying in person?
- Are you planning to accept payments over the phone, mail, fax or the internet? Can your customers schedule regular payments via credit card or bank debit?
- Do you want to enable your customers to pay by BPAY?
- Will you have international customers and will they be paying in a foreign currency?
How can your NAB Business Banking Manager help?
Every business is different. So you need to choose the right tools to create efficiencies in your operation. Once you work out the best payment options to offer your customers, it's worthwhile talking to your Business Banking Manager to determine the facilities that will provide you with the most efficient transaction system, ensuring you are not paying fees that can be avoided. Here are some examples of tailored transaction solutions:
SME with a large payroll
Writing out cheques or making internet transfers to pay salaries doesn't take much time if you have a handful of staff. But once your staff numbers increase, this manual system can be automated with NAB Direct Credit, allowing businesses to lodge bulk credit entries for the bank to process to other bank accounts without the use of paper entries. This is done with an electronic direct credit file on a PC, which is lodged with NAB, via National Online.
Retail store with a high volume of customers
When you are in a business environment, you want customers and staff to be able to process transactions quickly, accurately and easily. The NAB Eclipse EFTPOS terminal is designed to process a high volume of transactions and can handle preauthorisation and tipping (ideal for busy retailers, for example).
Merchant with low volume of transactions
Let's say you don't have to process credit or debit cards frequently. Perhaps you are in a seasonal business or sell infrequently. The NAB Essentials terminal is designed for this, or you can be provided with a manual imprinter so that you can process credit card transactions manually. This way you can still provide your customers with the option to pay by credit or debit card.
Shopping website offering products globally
If you want to offer products to overseas customers in local currencies, a NAB MultiCurrency Facility allows you to process customer credit card transactions in a wide range of currencies, with all transactions authorised at the time of purchase.
Mobile tradesperson who travels to clients
If you need to accept payments for work done on site, a mobile solution like the NAB Escape EFTPOS terminal is a fully mobile wireless terminal. This is also ideal for tradespeople, couriers and cafes/restaurants that want to offer the option for diners to pay at the table. Creating the optimum mix of transaction solutions – for both payments made by and to your business – can save you time, ensure better account-keeping and boost your bottom line.