Your CPA can analyze fees as a percentage of revenue and advise you on the overall reasonableness of the cost. Not all merchant service providers are created equally. You need to establish a trusted relationship with a provider that is transparent about different options and rates with the willingness to educate so you can make the best decision for your business.
The other reason why you should review your rates with your CPA is simply due to the fact that the “best possible” merchant processing rate that the provider is offering may not be the best rate that other providers can offer. Have your CPA be your backbone and someone to lean on when making business decisions.
Look at your statement, ask for a full deck of what you are paying for each month, and engage with your provider so that you can understand all of the fees that you are paying. Once you understand what you are actually paying for, you will be able to understand the value of what you are paying for. In some certain circumstances, depending on your industry, you may be paying a higher rate but the question is, are you receiving a higher value?
Think of merchant processing as a standard fee that you need to think of as a cost of doing business. Sometimes it can be a resource for collecting payments. How much would you be willing to spend to have your clients pay you immediately instead of making late payments?
Be aware of the cost of merchant processing, but also the quality of services. As a business owner, you cannot afford to focus on only the “low cost leader” but having solutions that work for you. Sometimes you may need to onboard a processor that has a slightly higher fee in order to have a solution that directly plugs into your ERP system.
Look at merchant processing as an area of opportunity to not only grow the business but also help keep your employees engaged with better software. If you find an opportunity to improve the way you accept payments, your team members will see that you value the work they do and will continue to do great work for the company.
Additionally, when selling your business, make sure to review and see how best you can keep as much money in your profit statements as possible. If you don’t allow credit cards, you could be hurting your business by not diversifying the way you accept payments, especially from clients that haven’t paid you. Cashflow is vital to the success of your business, don’t let your software be a barrier.