Avoiding Credit Card Processing and Working Capital Mistakes

Merchant Warehouse |

December 8, 2010

Steering clear of crucial business credit card processing mistakes is critical but potentially exhausting to achieve. It is important for any business to secure appropriate finance terms for major loans, naturally. Businesses that borrow for commercial purposes should expect improved business capital availability and revenue so long as their management methods are solid. This is the best way to avoid a disaster in financial matters. Taking appropriate precautions beforehand can eliminate future problems.

Recent surveys have shown that some potential difficulties are simply due to facts that merchants are unaware of, namely, just how common and serious credit card processing and working capital mistakes can be. We should discuss some of the more severe issues that should be anticipated.

Check the Fine Print

Some hardworking capital loan agents are understandably more interested in gathering revenue from actual credit card transactions than anything else, including helping merchants manage their money better. As a result of this, there are many misrepresentations about how helpful they can actually be in the process of securing financial help for businesses through credit card financing. With the occurrence of these misrepresentations comes the high cost of time and energy used to finalize business loans. Some merchants may feel rushed in order to complete the process of switching processing providers to those represented by the agent.

Companies should focus their attention on providers that are able to avoid the unethical conflicts of interest. This should be the preferred method of approach for any provider whenever possible. For instance, if an individual is advising a business owner about business financing services and will not profit in any way from the credit card processing procedures, then that individual is likely to provide a more unbiased recommendation.

Keeping the Cash Flowing

Merchants want solutions to their problems, not the runaround. Representatives of any account provider should have the ability to present adequate strategies and give complete answers to any questions asked of them. Still, business owners should take the time to speak with a business finance expert. They have the knowledge that will help the merchant develop a safe system for ensuring adequate business capital.

The point that needs to be emphasized is that it’s not necessary for any business owner to have to accept negative trade-offs. The recommendations for strategic moves that will allow merchants to avoid these issues are all centered around putting time into working with a professional advisor who can give advice that is not only helpful but also tailored to the merchant’s situation. Credit card processing that is efficient and effective, combined with safe and reasonable amounts of A/R financing and credit sales factoring, can help ensure adequate capital for the business.

Bottom Line is the Bottom Line

When credit card processing is efficient, returns are minimized, chargebacks are avoided and the account provider is doing a good job, business owners will have the maximum cash flow possible from their card sales. If there is an occasional, or even ongoing, need for additional capital, such as for expansion of the business, then credit card sales factoring and other methods can be employed if they make sense.

Of tremendous importance, of course, is having updated, current financial information. This means that income and expense reporting must be accurate and timely, and that any changes in assets and liabilities are also studied for their impact on the merchant’s credit standing and solvency. When all things are in balance, and credit card processing is set up in such a way that it keeps a steady, predictable cash flow coming in, then a merchant can assume at least two things. One, that the plan is working now but needs constant monitoring and, two, that they have the right merchant account provider, one that is doing a complete job for them, the merchant.