Some small businesses operate fully on cash sales for several reasons. However, with the changing times and changing customer preferences, if your small business relies on cash sales only, you are shooting yourself in the leg.
How many times have you gone to businesses and found out they are cash only? If you are not the type to use or carry around cash, these experiences can be very frustrating. The same happens to customers when they come to your business and find out you are cash only. What happens when they actually don’t have cash on them? That’s how you lose potential customers and chase them into the hands of your competitors without even realizing it.
The popularity of cash is declining with time and cashless payment options are on the rise. As a small business, you need to consider payment options beyond cash. Cashless payment options such as mobile payment apps, credit cards, smart cards, e-wallets are more convenient to customers than before.
With the pandemic, contactless payment options have been a necessity and more consumers have been forced to adopt it as a safety measure. Now, even customers who were keener on cash before will or have a new attitude towards traditional cash transactions.
Well, some business owners and some customers remain adamant about using some cashless payments such as credit cards because of the transaction fees. However, this is in a small percentage and that shouldn’t stop you.
Even with cashless payment methods being on the rise, cash still remains the king and you shouldn’t get rid of it. Let your small business accommodate both payment systems in order to accommodate all types of customers.
Why you should consider Cashless systems for your small business.
Unlike cash only, cashless systems make your accounting easier.
Amanda Abella in Due Accounting says the cash-only system is an accounting nightmare for several reasons. Keeping track of cash is more difficult than it is using online payment processors.
Cash can easily get lost and go unaccounted for easily and accidentally or get mixed up with personal cash and this can be a disaster during tax time.
With cashless methods, payments are automatically loaded into your accounting software, unlike cash where the cashing is done manually. Manual cashing is open to so many errors and takes a lot of time to do and balance up. And anyway, there is so much your accounting personnel or bookkeeper could be doing other than wasting time cashing.
Additionally, cashless payment systems make it easier for small businesses to navigate payments from customers to suppliers and partners.
Automated cashless payment processes are more accurate and reliable. They provide you with accurate records of all your transactions from customers, or to vendors.
Some businesses think that cashless payment methods are not safe with the thought of cyber-security in mind. Some argue that with online processors, cashless systems open your business up to security risks.
They think handling cash physically is safer. However, that’s not always the case. Your money is not safe somewhere in your office or in your home and it is actually very little you can do to make sure it remains safe.
On the other hand, there are a few things you can do to make sure your business and client information is safe online. Think of having someone whose responsibility is towards IT security. Adopt a two-factor authentication and change your passwords every so often.
Additionally, cyber-security has advanced over time making it easy to detect fraud or abnormal activities in your system. Also, credit cards now have built-in protection over fraud.
Do your research and find a cashless system that is well-known and that is more trusted.
This is an obvious advantage. With more payment options available in your business, you are giving your customers more ways to buy your products or services.
With only one available option, you are likely going to lose several customers who don’t carry cash around or who didn’t carry cash on that day.
According to Bankrate, 9% of people don’t carry cash around at all and 40% of those carry less than 20 dollars or less.
Most of all, we are living in a different era where people are more savvy than before. So, if you don’t meet their digital needs, they will go to your competitor next door who can meet their needs.
Why then limit your sales potential by having a cash only sign at your paying point?
4.Improved Cash flow.
Compared to cash, cashless payments are processed easily and faster. That means your transactions processed and are transferred into your business bank account within a short period of time – either hours or a few days.
On the other side, if you work with invoices for example, it might take time to collect your invoices. Waiting for cash checks can also be very frustrating and sometimes the checks have some irregularities that might take time to correct. Some bounce and this affects your business’ cash flow.
Also, with cash, you constantly have to keep going to the bank to deposit the money. These two might interfere with your business bills if you don’t collect your invoices on time or deposit on time.
With a cashless system, sending and receiving money becomes easy and you will be able to access your funds and take care of your business financial needs on time.
5.Cashless payment systems are inexpensive for your business.
Well, business worry that cashless payment systems come with additional associated fees. But, there are so many ways to ease such.
The digital payment space is very competitive and with each wake of day, more and more merchants provide packages to help you reduce the additional associated fees. Above all, this is so much better than the loss of customers.
Look at it this way, handling cash is not cheap either, and it comes with its own costs. First, you need to train your employees to correctly handle money and count register balances.
Two, you need to transport your money safely to the bank if you are transporting high volumes and you are likely going to hire an secure car service for that. These car services are not cheap.
Three, depositing huge amounts of cash or checks at the bank comes with high depositing and processing fee too.
Cashless payment systems allow you to cut out some of the expenses that come with physical cash handling.
6.A more legitimized business.
Business gurus say that cashless payment systems actually have an influence on customers. They say that, customers are more likely to trust businesses that allow cashless payment methods such as cards.
In simple terms, when a customer notices you accept a card brand they use, they will trust your business. This is because they trust their card brand and it’s through brand association they end up trusting your business.
Above all, when your business gives customers more options, they feel accommodated and that you anticipate their needs.
As a business, it all comes down to selling your product or services as much as possible. And, the only possible way to do this when it comes to payments is having a payment system that accommodates both cash and cashless. This way, customers with and without physical cash can actually pay for your products or services.
With cashless your accounting is made easy because there are more automated records, and you have an improved cash flow.
At the end of the day, with both cash and cashless systems, you have increased sales as you have opened your business to more possible sales.
Make your life and your customer’s life easy by accepting different payment forms.