One of the most important things to think about when running a business is how you will accept payments from customers. Many companies still take checks, but this can be a risky option. Credit cards are a much safer way to accept payments, and here’s why.
- High Accounts Receivable Turnover
Accepting credit cards is a much better approach to accounts receivable management because you can accept payments from people in your area or worldwide. This allows you to have accounts receivable turnover in a few days instead of waiting up to 30 days for a check to clear.
- Low Bad Debt Percentage
Accepting credit cards can be valuable to your accounts receivable management strategy because you don’t have to worry about bad checks. This gives you a low bad debt percentage, which can save you a lot of money in the long run.
- You Get Paid Faster
Having accounts receivable turnover and a low bad debt percentage is key to running a successful business. But getting paid quickly can also improve your cash flow and give you more money to keep your business growing.
- Credit Card Holders Spend More Than Those Who Pay With Checks
When you accept credit cards, your customers can buy more because they know that the payment will be secure. Moreover, credit cards are pretty popular and are used very frequently. This is a very beneficial way to improve your accounts receivable turnover.
- Eliminating the Risk of Bad Checks
When you choose to accept credit cards, you eliminate the risk of bad checks that are much more common than you might think. When a customer pays using a debit card, the transaction will go through if they have the money. You don’t have to spend time and resources tracing someone over a bounced check.
- Improve Customer Experience
Credit cards are pretty easy to use and are effective for online transactions worldwide. Allowing your customers an easy payment method will increase your sales while expanding your business to an even broader market.
- You Create a Transaction History
When you accept credit cards, you create a transaction history that can be helpful for accounts receivable management. This can give you an understanding of your accounts receivable turnover to make informed business decisions.
You should consider accepting credit cards because it reduces accounts receivable turnover time, which minimizes your bad debt loss. It also allows you to have a low bad debt percentage, which helps improve cash flow and accounts receivable turnover time to save you money in the long run.