4 Strategies for Improving Your Business’s Cash Flow with a Merchant Services Account 

Improving your cash flow can be a challenge for business owners, especially when it comes to increasing sales and driving stronger profitability.

One of the best and most reliable options for accelerating the rate at which you can accept payments and gain access to funds is to open a merchant services account with your local bank.

This type of account will allow you to accept credit and debit card transactions and often acts as a stepping stone into better and more efficient strategies for increasing your cash flow over time.

In this article, we’ll explore several key strategies you should implement to enhance your cash flow and drive stronger results for your business.

Note, however, that every business faces unique headwinds and challenges. For this reason, we strongly recommend that you discuss your business’s needs more broadly with a local banker to better understand the role that a merchant services account will play in improving your business’s overall financial health.

What is a merchant services account?

A merchant services account is a service that allows businesses to accept credit and debit card payments.

Typically, these services are provided by a payment processor (such as Clover) who will handle the transaction itself before depositing the funds into your business checking account.

When a customer makes a transaction at your business using a credit card, your payment processor will take the information from the payment (the card number and other verification data) and handle the transfer of funds out of the customer’s credit account and into your business checking account.

There are several benefits to opening a merchant services account, which all center around ensuring you can safely and quickly accept credit and debit card payments from customers:

• Accept credit, debit and digital payments — Due to regulatory restrictions and processes embedded in most financial institutions, the only way to accept credit, debit and online payments is to open a merchant services account.
• Increase security and reduce fraud and chargebacks — One of the largest benefits of a merchant services account is that it provides multiple layers of protection for every transaction, significantly reducing the risk of fraud and chargebacks and ensuring your customer’s data is secure.
• Get paid faster for customer transactions — By offering credit and debit options to your customers, you can ensure you get paid faster and gain access to the funds you need to keep your business moving. Additionally, some payment processors offer rapid deposit options, which allow you to transfer funds to your bank account immediately after receiving payment.

4 Strategies to accelerate cash flow with a merchant services account 

Improving your business’s cash flow doesn’t have to be difficult.

In fact, by making a few small changes to your processes and operations (and taking steps to accept credit cards and online transactions) you can quickly and easily streamline your finances and propel growth.

1. Optimize your accounts receivable process and improve the customer experience

Effectively managing your accounts receivable is critical to keeping your business’s cash flow healthy and driving long-term profitability.

Most importantly, providing a streamlined and efficient payment process to your customers is an excellent way of building goodwill and driving repeat business.

Remember, customers come to your business because they want to purchase your product or have a problem they want solved.

Limiting payment options to cash, wire transfers and other non-digital payment options adds friction at the end of the buyer journey and runs the risk of leaving customers with a bad impression right at the end of the process.

Instead, it’s critical to prioritize the customer experience by offering a variety of options for making purchases or paying their bills, from swiping their credit cards to filling out a payment form on your website or connecting to their preferred digital wallet.

In doing so, you can improve customer satisfaction, leaving them with an overall positive impression of your business by foregrounding the most important part of the transaction: the product or service you’re selling.

2. Offer discounts and incentives for repeat purchases, fast payments and setting up recurring billing

In an ideal world, every customer would fully pay their invoices and bills in cash at the moment of the transaction.

In reality, this is neither reasonable nor expected, especially for customers who make large purchases or run up significant invoices over extended periods of time.

For this reason, many businesses choose to offer discounts and incentives to customers who make repeat purchases, pay their bills quickly or who set up recurring billing as a means of securing steady cash flow month over month.

From the customer’s perspective, they gain access to discounts and benefits for making repeat purchases, paying invoices and bills quickly through an online portal (or by setting up recurring billing on their credit cards).

Meanwhile, you, the business owner, gain a steady, reliable income stream from customers who are more likely to prioritize paying their bills in full and on time.

3. Leverage data and analytics to make informed business decisions

It can be hard to keep a close eye on exactly when goods and services are paid for if you rely on cash and checks as your primary payment options.

Because of this, many businesses are increasingly turning to payment solutions such as credit cards and online payments since they offer both faster and more immediate information about your current finances and more detailed data about customer behavior.

Specifically, integrating your payment system with data analytics tools is an effective way to gain insight into buyer patterns, allowing you to make more informed decisions about inventory and operations and increasing your business’s efficiency.

For example, you could track sales in real-time to gain insight into your best and worst-performing items, locations, times and team members at a glance, allowing you to more readily shift your attention or resources to where you can have the greatest impact.

You can also track sales patterns over longer time frames, such as months or even years, to forecast and anticipate changes in buyer patterns, providing you with the information you need to make better decisions about your business.

4. Leverage different point-of-sale (POS) systems to take your business on the go

Businesses are no longer locked to stationary devices in brick-and-mortar locations.

Instead, new and emerging technologies—particularly mobile POS systems and card readers—are empowering business owners to take their payment systems on the go, whether at the counter, in line, at the table, curbside, on delivery or in the field, and even expand to online sales to reach a larger customer base and sell more.

For business owners, this can mean a large increase in cash flow as customers are presented with faster, easier and more immediate options for making purchases or paying their bills, rather than having to mail in a check or pay in cash at your store.

For example, imagine you own a roofing company where you send salespeople to follow up on leads.

Before having access to a mobile card reader, you might have to write down the customer’s credit card information or have them send a check to acquire the initial payment you need to order the shingles or other new materials.

Using a mobile POS system, however, would empower your sales personnel to collect payment at the moment the customer signs the work order, speeding up the entire process and helping you secure funds immediately rather than having to wait on the customer or for a check to clear.

Work with a local banker to set up a merchant account and jumpstart your business’s growth

Cash is the lifeblood of any business, which means that finding ways to improve cash flow should be a top priority for any business owner.

Leveraging a merchant account to help your business accept credit, debit and online transactions is an effective strategy for improving your business’s cash flow, as it gives your customers more options for paying their bills in full and on-time.

Merchant services can provide other benefits to your business as well, such as increased security on transactions and a more seamless buying experience overall for your employees, allowing you to process more transactions faster and with greater ease.

To learn more about the different ways that opening a merchant account can help your business, you’ll want to speak with an experienced banker who has a deeper understanding of your business’s unique challenges and situation.

By speaking with a banker, you can get the advice and know-how you need to make effective use of a merchant account and all the various perks and benefits that come with opening one.

If you’d like to discuss a few solutions for your business's cash flow and payment challenges, please don’t hesitate to schedule an in-person meeting with one of our local bankers.

We’d be happy to provide you with the tools, resources and information you need to make the most of each and every business transaction.