After our last article, which looked at the costs of accepting credit and debit payments, you may be a bit overwhelmed, or even depressed! But, yes, accepting credit card and debit card payments can have cost advantages to a small business owner. Let’s look at three of those cost savings benefits.
1. Decrease the time spent on your monthly billing cycle
A typical small class-based business, such as a dance studio, gymnastics school, or swim school of, say, 100 students can expect between 5% and 15% of their accounts to be late each month.
That may not sound like much, but that adds 4–8 additional administrative hours or more each month, chasing down payments from customers. Those hours cost you money and lost business opportunities. It also leads to grumpy studio owners.
Accepting credit cards for your business can reduce time spent on chasing down late payments by 50 to 80 percent. Think what you could do with an extra 4 to 8 hours each month!
2. Reduce uncollected debt
Another cost of running a small class-based business is uncollected debt. When a parent who could not afford your classes gets too far into debt, they are likely to never pay you back the full amount.
Shifting responsibility from your studio to the customer’s credit card company allows you to collect those fees even if the customer defaults on paying their credit card bill.
3. Keep your administrative costs down
As your business grows, you will likely add instructors and more class types to bring excellent services to your students and their parents. But at the same time, you don’t want your administrative costs to skyrocket.
Rather than adding additional admin staff to deal with customers, take those savings and invest them back into your classes and instructors by empowering customers to pay their bills to you online, unassisted by you.
In our next article, we’ll also look at the cost of NOT accepting credit card payments.