Managing Finances
Taking Payments
Providing a variety of payment methods allows the business to meet the needs of its clients. Cash and cheque are traditional methods of payment and most businesses also take payment by credit or debit card although this involves an initial cost to the business to purchase the card reader and phone line / internet connection that it works through. BACS payments involve the client transferring money from their own bank into the business bank account. BACS payments tend to be set up for regular payments, but can be used for one off payments. Due to advances in technology there are a number of online, electronic payment methods where accounts are set up by both parties and payments can be made.
Regardless of the payment methods the client should be provided with a receipt stating the following information:
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Name and address of the business
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Date of purchase
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Cost of products or services provided
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Total cost
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VAT (if appropriate)
All cash and credit / debit card receipts should be kept in a locked box or till and in an area not accessible by the general public.
Advantages and disadvantages for different payment methods:
Cash
Advantage
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Instantly there, no worries of it being unavailable
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Handy to have for petty cash
Disadvantage
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Have to take to a bank to put into account
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Easier to get lost or stolen
Credit / Debit Card Payment
Advantage
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Easy to do with chip & pin / contactless. Can be done using mobile devices
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Most people pay by card & have either debit or credit cards
Disadvantage
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Have to pay for machine & often charges apply
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Payment can be denied & need to have connection to the internet
BACS Payment
Advantage
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Straight in bank
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No charges apply
Disadvantage
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Have to be able to check money has gone in via online banking, telephone or at the bank
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If many payments, can be confusing who each is from if not referenced correctly
Online Payment (Electronic payment transfer)
Advantage
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No worries about sharing bank details
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Can be quick & easy for client
Disadvantage
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Charges can apply per transaction
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clients might not have the facilities to use it