Check it!
Payment comes in many forms. In the dog world, it is often in the form of treats and toys. In the small busienss workd, it should come in the easiest form for the small business to process. In many cases, that is a business paper check.
For small businesses and, in particular, micro businesses or sole proprietors how they are paid is very important. It is not just about receiving payment, it is how that payment is received.
Early on in this Blog series, we discussed the different forms of payment to businesses. Electronic methods, such as ACH or Wire or PayPal are often reserved for larger companies. The reason is primarily the cost of the service or software and the administrative burden to setting the electronic payment up. This is a very heavy lift for a sole proprietor. It is why most of us use business checks. We prefer to receive them for payment and use them as payment to others.
Recently, we have been seeing projects or larger firms looking to sole proprietors to buy software to get paid or use software like Quickbooks to send out invoices and make it easier on the larger company to pay. Let us be clear. The burden is not on the sole proprietor to be paid. The burden should be on the larger company or the client to pay you in whatever manner is easiest for you as a sole proprietorship.
Often, if there is government funding in the equation, the larger company is using the smaller firm to check off a box for a woman or minority or some other qualified business. In this scenario under no circumstances should you have to buy a supply chain software, or pay for an ACH service through software like Quickbooks or your bank platform. . These are real additional costs - $500+ a year. That is an expense a sole proproetor dows not need and should not be expected to bear that burden. Yet it is being thrust on a few businesses we work with.
In our IWON Group we require personal checks or cash. We prefer checks but if for some reason the member cannot provide a check, we will accept cash. That is it. These are small groups and Illuminate should not bear the burden of a credit card service or an ACH service because individuals do not want to write a check.
Business checks are used often by sole proprietors and micro businesses we work with. If you find yourself working with someone with less than 10 employees, bring your checkbook along. It is a proven acceptable form of payment and often is the cheapest way to process payment for that smallbusiness.
Be well.
