What is a Payment Management System?

SMB owners wear many hats, managing everything from staff to sales. Adding to the already tough job of managing a small or medium business is the complex task of understanding how payment processing works, including managing the fees, equipment, accounts payable and more. 

Here’s where a Payment Management System (PMS) can swoop in as your financial hero to understand your business better.

TL;DR

  • Payment Management Systems manage payment processing so you can accept payments, send invoices, track transactions, and view financial data.
  • Look for a PMS that can serve as an all-in-one platform for payment processing, integrates with other technologies, offers appropriate POS equipment, and prioritizes security compliance.
  • Government agencies have a payment management system to manage grant award payments, making the search for payment management system information more complicated.

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What is a Payment Management System?

Think of a PMS as your financial command center. It consolidates all your payment processing needs into one user-friendly platform. A PMS accepts payments, sends invoices, tracks transactions, and analyzes your financial data—all in one place. 

You may also hear the term Cash Management System (CMS) in your research. A cash management system focuses on the big-picture health of your cash flow, while a payment management system handles the processing of individual transactions. Imagine cash flow as a river—cash management oversees the whole flow, while payment management ensures water gets in and out smoothly. 

Your PMS is a central hub to manage payment requests and store banking information (like your routing and bank account number for ACH payments). A comprehensive PMS is especially useful for SMBs, where efficiency is key and understanding financial performance in your business shouldn’t be overcomplicated. 

Key Features of a Supercharged PMS

So, what exactly should a payment management system provide to your business? Key features of a well-built PMS include:

  • Efficient transaction processing: Speed and accuracy are key, and a good PMS should process payments quickly and with a user-friendly interface, keeping your cash flow smooth and customers happy.
  • Robust security measures: Any PMS worth its salt needs to have standard security features like encryption, fraud detection and compliance with industry standards, including the PCI DSS.
  • Helpful integration capabilities: You don’t want a PMS siloed from other technology. Integration with your accounting software, CRM, or inventory system saves you time and effort when analyzing financial performance.
  • User interface and experience: Your PMS should be intuitive and easy to navigate, allowing you to focus on running your business, not wrestling with technology.
  • Reporting and analytics: A good PMS provides you with reporting and analytics tools, giving you valuable insights into your cash flow, customer trends, and spending patterns.

The Diverse World of Payment Management Systems

If you’re seeking to understand what payment management systems are, a quick internet search will yield some information worth explaining before we get too far into the various PMS options for SMBs.

The U.S. Department of Health and Human Services (HHS) also has a Payment Management System, which is a centralized grant payment system managed by the federal government. The Program Support Center for Payment Management Services (pms.psc.gov) serves as “a fiscal intermediary between federal awarding agencies and award recipients.” Also available through the HHS is the Federal Financial Report (FFR), which provides information about grant award spending, grantee information, and various disclosures.

Essentially, these federal agencies have a specific PMS to track grant award payments and payee information, ensuring federal cash disbursements are securely managed, and grant recipients can receive their awards in an auditable way.

Now, let’s break down various other terminology related to payment management systems you’ll encounter in your small or medium business:

  • Merchant account providers act as a middleman between your business and the bank, allowing you to accept credit and debit cards.
  • Payment gateways securely process online payments, acting as a bridge between your website and the payment processor.
  • Payment processors handle the nitty-gritty of authorization, settlement, and transfer of funds between your business and your customer’s bank.
  • Point-of-sale (POS) systems are the all-in-one systems you see at retail stores, handling in-person transactions and often integrating with inventory management software.
  • Mobile payment systems let your customers use different payment methods like their digital wallets, contactless card payments and more, offering a convenient and secure way to accept payments on the go.

What Are the Benefits of a PMS?

A payment management system that handles incoming revenue and purchase expenditures effectively, is one of the many tools at your disposal to optimize your business operations. Not only should your PMS help simplify payments and reduce manual time spent, but it should also help you make more money. In fact, 72% of SMBs believe automating accounts payable tasks would improve their cash flow. Here are a few benefits at the top of our list:

  • Boost efficiency: Automate tasks like sending invoices and reconciling accounts, freeing up your time to focus on growing your business.
  • Enhance security: Gain peace of mind with secure transactions, trusted fraud protection, and industry-standard compliance features—all essential components of a good PMS.
  • Streamline checkout: Move beyond clunky POS systems and give your customers a better experience. Modern POS tools are user-friendly, simple, and speedy.
  • Empower decisions: You’ll gain valuable insights from financial data, helping you make informed business decisions with a well-built PMS.

Choosing the Right Payment Management System

With so many options, choosing the perfect PMS can feel overwhelming. Here’s what to consider:

  • Assessing your business needs: Look at factors like the volume of transactions in your business and the most common payment methods used by your customers to determine the best PMS capabilities for your business.
  • Cost and fees: Subscription fees, transaction costs, and miscellaneous charges vary depending on your payment processor. Use actual or projected data to price out the true cost of your payment provider before signing a contract to ensure you’re not overpaying.
  • Integration with other business tools: Does your PMS integrate seamlessly with existing software? Data silos are never good for business, especially when we’re talking about your finances, and integrations make your life easier.
  • Secure payment comes standard: Make sure your PMS meets Payment Card Industry compliance standards—this is a non-negotiable.
  • Customer service on your terms: When things don’t run smoothly, having customer support 24/7/365, means you can spend time on what matters most.

Conquering Implementation Challenges

Implementing new technology like a PMS is not without its challenges. To avoid long calls with the help desk, make sure your PMS integrates well with other systems and opt for a partner that can support you with implementation. 

You’ll also want to make sure to assign appropriate user access to your staff and work with any new user so they know how to use the technology, including both hardware and software training to help avoid errors and ensure a better user experience.

Ready to Tame Your Financial Chaos?

At Stax, we understand the juggling act all small and medium businesses contend with. That’s why all of our solutions are designed to simplify your life—from our subscription-based pricing to top-of-the-line POS equipment. 

With Stax, you get all the features mentioned above, plus exceptional customer service as your payment management system.

Ready to get started? Get in touch!

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FAQs about Payment Management Systems

Q: What is a payment management system?

A Payment Management System (PMS) is a software solution designed to handle all aspects of payments within an organization or between businesses and their customers. This type of system typically automates processes such as payment processing, invoicing, billing, and tracking of payments.

Q: What is the PMS system for federal grants?

The PMS system for federal grants refers to the Payment Management System operated by the U.S. Department of Health and Human Services (HHS). This system is designed to manage the disbursement of funds for federal grants and cooperative agreements. It provides a centralized platform for grant recipients to draw down funds, and for federal agencies to monitor and manage the distribution of these funds.

Q: What are the benefits of having a payment management system?

One of the key benefits of a PMS is efficiency. It automates payment processes and reduces manual effort and speeds up transactions. Beyond that, having a robust PMS could improve your cash flow. Real-time tracking of payments and receivables helps businesses manage your funds flow more effectively. PMS can also  ensure compliance with financial regulations and standards by providing accurate records and reports.

Q: How do you select the right payment management system?

Start by assessing your needs and specific payment processing needs, including types of payments, volume, and any industry-specific requirements. From there, look for systems that offer the features you need, such as multiple payment methods, integration capabilities, reporting tools, and compliance support. Be sure to compare  pricing, including setup fees, monthly fees, and transaction fees, to find a solution that offers good value.

Would My Business Benefit From Using A Contactless Virtual Terminal?

Every business operates differently, but the one thing they all have in common is that every business accepts payments. New payment tools like NFC contactless payments that help your business grow and provide a high-quality customer experience are in high demand. And while solutions like POS systems are perfect for in-person payments, what about when you need to offer remote billing or refunds, or if you need to process a customer’s credit card over the phone?  With a virtual terminal, this functionality allows your business to accept credit and debit card payments with nothing more than a computer and an internet connection.

Although it’s not a necessary tool in every small business owner’s arsenal, the contactless virtual terminal is a smart solution for some types of businesses, like those that take payments online or over the phone. But what exactly  is a contactless virtual terminal and can your business benefit from adding it to your payment solutions? In this article, we’ll dive into everything you need to know about virtual terminals, and how to pick the best virtual terminal on the market. 

TL;DR

  • Basically, a virtual terminal is a web-based application that allows you to enter credit card details manually via the internet. This solution allows you to accept payments over the phone or in person from your computer, all without needing a physical card reader or point of sales terminal.
  • A virtual terminal is fit primarily for businesses such as food delivery services, professional services, freelancers, and healthcare providers. These businesses often conduct most of their business over the phone, submit electronic invoices, or have recurring monthly membership services fees.
  • Virtual credit card processing terminals provide several up-to-the-minute security features, keeping your customers’ financial information safe. Because the transaction takes place through a payment gateway that utilizes data encryption or tokenization to secure sensitive information during transmission, accepting payments using a virtual terminal from Stax (which is PCI compliant) is secure.

What Is a Contactless Virtual Terminal?

Basically, a virtual terminal is a web-based application that allows you to enter credit card details manually via the internet. It allows you to accept payments over the phone or in person from your computer, all without needing a physical card reader or point of sales terminal.

Built for recurring billing and online invoicing, a contactless virtual terminal is fit for (eCommerce) businesses that primarily operate over the phone and take mail orders, handle online invoicing, or have recurring monthly memberships. An added benefit of using a contactless virtual terminal is the increased flexibility in accepting payments over the phone, online, and in-person, all without ever having to use a physical card.

Still confused about how a virtual terminal works? Think of it as a digital credit card reader, which means you need no extra equipment besides a secure wifi connection to process card-not present transactions and payments.

How Does a Contactless Virtual Terminal Work?

Powered by a payment gateway, a contactless virtual terminal provides payment processing and authorization services through an online platform. Without any required hardware you can get paid faster and more conveniently while still offering you the flexibility to accepting credit cards, debit cards, and ACH payments. All you need to do is log into your virtual terminal through a computer or mobile device, enter payment information into a form, and with the click of a button, the system processes the payment.

Virtual terminals also verify the purchase, issue customer receipts, and report all transactions within the dashboard. The business dashboard shows sales trends in a simple view, making you aware of growth or areas of concern for your business.

A contactless virtual terminal can also serve as a backup to your point of sale (POS) system. Having a virtual credit card processing terminal on standby adds additional flexibility and simplicity to your business.

Can My Business Use a Contactless Virtual Terminal?

A virtual terminal is fit primarily for businesses such as food delivery services, professional services, freelancers, and healthcare providers. These businesses often conduct most of their business over the phone, submit electronic invoices, or have recurring monthly membership services fees.

Having the ability to take payments by phone or online by adding a virtual terminal to your payment offerings allows increased flexibility and accessibility. For example, if you’re a restaurant that requires a deposit when booking, a virtual terminal can be a great solution that’ll allow customers to quickly and securely book using their credit card info.

Plus, by providing a more seamless and streamlined payment option, you can easily improve your customer’s check-out experience. Faster, more secure, and effortless transactions provide opportunities for more sales in less time and less abandoned sales due to a hassle-free shopping experience.

RELATED: What to Look for When Choosing an In-Person Terminal For Your Bar

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Is the Contactless Virtual Terminal Secure?

As a business owner, you must safeguard your customers’ payment details. Not doing so could create distrust among your customers and seriously impact your business. Virtual credit card processing terminals provide several up-to-the-minute security features, keeping your customers’ financial information safe. That’s why all payment data submitted via the contactless virtual terminal has to go through PCI Compliant procedures, since it helps make sure that your customers’ sensitive information is always safe.

Because the transaction takes place through a payment gateway that utilizes data encryption or tokenization to secure sensitive information during transmission, accepting payments with the use of a virtual terminal is secure. Despite these built-in safeguards, it’s important to be cautious. After all, human error is still a factor. To help mitigate these risks, make sure your employees never write down credit card information on a piece of paper or store it in any way outside of your virtual terminal.

What Are the Benefits of Using Stax Contactless Solutions?

With Stax, not only will your business have access to the wholesale card-not-present rates, but you’ll also gain access to the contactless payments tool kit including the Stax Contactless Solutions. In addition to a full-featured invoicing and billing platform, you’ll have the option of creating an online shopping cart for your business and the ability to communicate with your customers quickly and efficiently through 2-way text messaging.

Here are just some of the perks of our  Contactless Virtual Terminal:

  • Instant Online Shopping Cart – Add items or services to your catalog, then publish them to your online shop in one click. No domain purchase needed!
  • Text2Pay – Text message requests have a 97% open rate with an average customer response within 90 seconds. With 2-way text messaging,merchants and customers can talk back and forth, make changes, and even make payments.
  • Customer & Catalog Management – Track relevant customer information, including tokenized cards. Store catalog items and keep track of inventory and sales against certain goods or services.
  • Quick Payment for Keyed-In Phone Payments – If a customer orders over the phone for curbside pickup, employees can securely key in sensitive payment information while on the phone.
  • Recurring & One-Time Invoicing – Send professional electronic invoices via email or text and allow customers to pay via email or text. Set up recurring payments or invoices for the customers as needed.

Stax Contactless Virtual Terminal Pricing

At Stax, we’re fully committed to offering transparent pricing and transaction fees, no matter which of our products or services you need. The same goes for our virtual terminal: with membership-based pricing, we guarantee access to our wholesale credit card processing rates. Plus, there are no hidden fees or lengthy contracts, meaning you can cancel your virtual merchant account whenever you want instead of being tied down to a long contract. (If you’re curious to learn more about our pricing for our virtual terminal services, click here.)

Would My Business Benefit From Using Contactless Virtual Terminals

Whether it’s invoicing, recurring billing, pay by phone, contactless or credit card payments, or a one-click shopping cart, Stax offers multiple virtual payment options that can help your business streamline payments and foster sustainable growth.. Start saving on payment processing fees with Stax. Contact us for a demo today.

You Might Also Like: How a Restaurant Supply Company Can Improve Sales With a Virtual Terminal

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FAQs about Virtual Terminal

Q: What is a virtual terminal?

A virtual terminal is a web-based application that allows merchants to process credit card transactions without the need for a physical card reader or point-of-sale (POS) system. It enables merchants to enter credit card details manually into an online interface to process transactions. Virtual terminals are typically used for phone or mail orders, or in situations where the physical card is not present.

Q: What does a virtual terminal do?

A virtual terminal serves as an online interface for payment processing. It allows merchants to input payment information received from customers via phone, mail, or in person without swiping the card. The terminal connects to a payment processor to handle the transaction, including authorization, settlement, and management of the payments. It can also store transaction records and provide reports.

Q: What is the difference between POS and virtual terminal?

A POS system is a combination of software and hardware designed to facilitate sales transactions at a physical location. It often includes a physical card reader, barcode scanner, cash register, and a computer or tablet to run the POS software. Unlike a POS system, a virtual terminal is software-based and does not require specific hardware. It is primarily used for transactions where the card is not physically present, such as over the phone or via mail.

Q: What is the difference between a physical terminal and virtual terminal?

A physical terminal is a device that allows for card-present transactions. Customers can swipe, dip, or tap their card to make a payment. These terminals can be standalone devices or part of a more extensive POS system. A virtual terminal, on the other hand, is software that processes card-not-present transactions. It requires manual entry of card details by the merchant. Virtual terminals do not require physical interaction with the customer’s card.

Q: Can I use a virtual card at the point of sale?

Yes, but indirectly. A virtual card is a digital version of a physical card that exists only in a digital wallet or app. At a physical point of sale, you can use a virtual card if the POS system accepts contactless payments (NFC technology), and your virtual card is stored on a device that supports this technology (like a smartphone or smartwatch). However, a virtual card itself cannot be used directly with a traditional card reader that requires swiping or dipping a physical card.

 

Q: Is a virtual terminal a gateway?

They’re closely related, but a virtual terminal isn’t the same as a payment gateway. A payment gateway is the service that authorizes and processes credit card transactions online, securely transmitting data between the merchant and the acquirer. A virtual terminal is a tool or interface that uses a payment gateway to process transactions.

Empowering Your Business with Stax Bill: A Comprehensive Guide to Billing Platforms

In today’s fast-paced business landscape, efficient and seamless payment processing is paramount to your bottom line. However, staying focused on the big picture can be challenging if your business is bogged down by repetitive payments and intricate billing procedures—both common hurdles for a billing system with inadequate functionality. 

As industry leaders in billing software, our mission is to help our customers work more efficiently, recover more revenue, and effortlessly collect invoices. 

In this article, we’ll explore the significance of billing platforms in contemporary business, delve into the features that set Stax Bill apart, and guide you through the process of selecting the right billing solution for your unique needs.

TL;DR

  • A billing platform is a comprehensive system facilitating subscription management, recurring billing, revenue recognition, payment gateways, analytics, and dunning processes.
  • Choosing the best billing solution involves a strategic evaluation of your business needs, scalability, vendor reputation, and pricing models. 
  • Subscription-based billing platforms ensure accurate billing cycles, efficient invoicing, and seamless customer subscription handling.

Stax Bill simplifies invoice and subscription billing management by automating manual financial processes. This subscription billing platform helps businesses improve accountability with clean and accurate books by eliminating the need to manually handle complex tasks. Additionally, the platform automates the dunning process to reduce customer churn and revenue leakage. Stax Bill offers increased accuracy and payment consistency during the payment collection cycle, allowing businesses to maximize financial health and subscription growth.

Stax Bill Subscription Billing Platform Dashboard

“The customization and advanced financial insight provided by Stax Bill firmly separates it from other subscription and invoice platforms available in the U.S.,” said Suneera Madhani, founder and CEO of Stax. “Not only does the solution provide the metrics needed to spur growth, but it has also proven to help subscription-based businesses reduce time spent on billing operations by about 80 percent so they can focus on what matters most.”

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What is a Billing Platform?

A billing platform is a comprehensive system facilitating subscription management, recurring billing, revenue recognition, payment gateways, analytics, and dunning processes.

There are several billing platform types, and depending on your business type some may be more useful than others. For the purpose of this article, we’ll cover the specifics of subscription-based and usage-based billing models, but there are others including project-based billing, one-time billing and tiered pricing models.

Subscription-based billing platform

Ideal for businesses with recurring revenue models, subscription-based billing platforms automate the management of subscriptions. These platforms ensure accurate billing cycles, efficient invoicing, and customer subscription handling. 

Usage-based billing platform

Tailored for businesses with fluctuating usage patterns, usage-based billing platforms provide flexibility in billing customers based on their actual consumption. This model is well-suited for industries where usage varies from month to month. 

Key Features of Billing Software 

Recurring billing and automated subscription management and payment processing

One of the main benefits of a subscription business model is revenue forecasting and product flow predictability. With Stax Bill, you can automate repetitive subscription billing tasks, ensuring timely and error-free invoicing, and enhanced cash flow predictability.

Your accounts receivable department will be thrilled when human error is reduced and the subscription and transaction process has payment processing built in. Efficiently manage payments and invoicing processes, reducing manual errors and enhancing overall operational efficiency.

Recurring revenue recognition—ASC 606-compliant

ASC 606 is the revenue recognition standard all businesses must comply with if they are entering into contracts with customers—so when we’re talking about subscription-based relationships, maintaining compliance with this standard is key. Ensure your billing platform is compliant with accounting regulations, particularly ASC 606, for accurate revenue recognition for subscription-based businesses.

Payment gateway and management

For subscription-based businesses, integrating with your payment gateway ensures a smooth experience and easy auditability by having all purchases consolidated in one place. Because Stax Bill is part of the Stax family of payment processing solutions, our customers enjoy a simplified experience, increased payment collection rates, full visibility into transaction fees, and ultimately cut down on costs for payment processing.

Subscription management and analytics

Insight into the lifecycle of subscriptions and real-time metrics to help you predict future business is crucial. Stax Bill is customer-friendly, empowering your customers to self-register and manage their own subscriptions in the self-service portal, saving your team time and giving subscribers a better customer experience, thus reducing churn.

Dunning management

Dunning, the practice of attempting to collect payments is usually time-consuming and laborious. Minimize revenue leakage by efficiently managing failed payments and subscription renewals with proactive dunning management in your billing platform.

Customization and integration capabilities with other business systems foster retention

Your payments ecosystem should be able to be customized to your specific needs, ensuring a seamless integration with existing business processes. No two businesses are the same, so choose a payment and billing platform that meets your current and potential future needs.

In the thriving SaaS landscape, application programming interface (API) capabilities are crucial to ensure smooth business operations. Stax Bill offers unparalleled integration capabilities, ensuring smooth coordination with your existing systems for a unified business operation. Stax Bill has native integrations to leading software your business probably already uses, including Salesforce, HubSpot, NetSuite, QuickBooks and more.

How to Select the Best Billing Solution for Your Business

Choosing the best billing solution involves a strategic evaluation of your business needs, scalability, vendor reputation, and pricing models. Here are a few key points to consider when selecting your billing platform solution.

Assessing your business needs

Identify your unique billing requirements, considering factors such as the nature of your products or services, customer base, and growth projections. For example, combining the functionality of a payment gateway with your billing platform creates a seamless experience for you and your customers (and Stax Bill is designed to do just that!)

Opt for a billing platform that can scale with your business, accommodating future growth and adapting to evolving market trends.

Evaluate vendor reputation and support services

Part of onboarding any new supplier or software solution includes due diligence—especially if we’re talking about finances and payments. Make sure you choose wisely by partnering with a company that upholds your values and operates with integrity. 

Comparing pricing models

Understand the pricing structures of different billing platforms, ensuring they align with your budget constraints and offer value for money. Many companies pay more than they need to for their payment processing and billing solutions software. 

Not sure if it’s worth the switch and want to learn more about the real costs? Check out the Stax Bill ROI calculator to see how much you could save.

Implementing Your Billing Platform

Once you’ve selected the right billing platform, the implementation process is critical for a smooth transition. Below is a basic overview of the steps you’ll need to take to successfully implement your billing platform.

Needs assessment: Identify specific business requirements and choose your billing platform provider.

Customization: During implementation, tailor the platform to match your unique needs (assuming you’ve chosen a platform that can be customized to your business needs).

Integration: Integrate with existing systems with API capabilities so your systems are connected and data can be analyzed in real-time.

Training: When implementing any new technology, training all users is the key to adoption and usage across your business. Stax Bill provides comprehensive training and ongoing support, ensuring your team is well-equipped to leverage the full potential of the platform.

Testing: Thoroughly test the system before full deployment and ensure everyone from your accounts payable team to your CFO is comfortable with the new software.

Ongoing monitoring and management: Regularly monitor the platform’s performance, address any issues promptly, and stay updated on new features and updates.

How Does it Work in the Real World?

When it comes down to “how well does this solution work”, the proof is in the reviews and customer case studies. Stax Bill has 4.2 out of 5.0 stars on the software review site, G2 and several case studies on our website that speak to the real-world impacts of our innovative billing solutions. Let’s examine some examples of successful billing platform implementations.

When it comes to simplified billing automation, one of our G2 reviewers couldn’t have said it better, “Stax Bill is super easy to use. It is customizable to suit your billing needs and has a great customer support team to help you when there are challenges.”

Another one of our customer reviews speaks volumes about the cost savings, “We were using a much more expensive billing solution when we found Stax Bill. The transition was very well supported, and we have been highly pleased with our Monthly Recurring Revenue collections since day 1. Later, we were able to shut down our other gateway and save additional fees for processing credit cards. On top of that, we are also able to add “auto-updating” for expired credit cards – a feature that would have been much more costly through our former gateway!”

Stax Bill helped our customer, The Covenant Group, redistribute 80% of their billing efforts to higher-level business operations by implementing recurring billing. The Covenant Group automated its lengthy recurring invoicing and payment process and customers are able to use the self-service portal to update their own information. Not only that, the delayed dunning process was eliminated entirely by using automated notifications about payments being due, payment failures, and outstanding payments.

Another valued Stax Bill customer, Avionica, was able to automate billing functionality and reduce time spent on billing-related processes. The team at Avionica now has access to granular reporting, better revenue and churn predictability and more transparent and accurate billing. The Stax Bill self-service portal also allows their customers easy access to their accounts to ensure they’re accurately charged and able to make changes when needed.

Ready to learn how Stax Bill can revolutionize your billing processes, streamline revenue management and contribute to revenue growth? Get in touch to learn more!

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FAQs about Billing Platforms

Q: What is a billing platform?

A billing platform is a software solution used by businesses to automate the process of invoicing and billing. It typically includes features for generating invoices, tracking payments, managing customer accounts, and reporting financial data.

Q: How do you create a billing system?

Creating a billing system involves: defining billing processes, selecting appropriate software, customizing it to fit business needs, integrating it with other systems (like CRM or ERP), and setting up secure payment processing.

Q: What are the capabilities of a billing platform?

A billing platform typically includes capabilities like invoice generation, payment processing, subscription management, customer account management, reporting, and integration with other business systems.

Q: What is a recurring billing platform?

A recurring billing platform is a system designed to handle repeated billing cycles, commonly used for subscription-based services. It automates the process of charging customers on a regular basis.

Q: What is the difference between a billing system and payment system?

A billing system focuses on generating and managing invoices and accounts receivable, whereas a payment system is designed to process monetary transactions, like credit card payments and bank transfers. While they often work together, they serve different functions in the financial process.

 

Is Quickbooks Desktop Being Phased Out?

There’s been a lot of discussion in recent months about the apparent phase-out of QuickBooks Desktop software. Some coverage has not been entirely accurate, which has caused a lot of confusion for Desktop users and questions like: Is QuickBooks Desktop discontinued? Will I still be able to use my existing QuickBooks Desktop software? Do I need to transition to a new system altogether?

QuickBooks Desktop is something of a linchpin in the accounting software world, with the first version of the program launching in 1998. This makes the apparent new direction of Intuit, the developer of QuickBooks, symptomatic of the wider transition within the SaaS space towards cloud-based software solutions. When it’s become so easy for users to access and share data remotely and sync changes in real-time, desktop applications are appearing increasingly cumbersome.

We’re going to dive further into recent announcements about QuickBooks Desktop and what this means for users, and what businesses should consider as their next move.

TL;DR

  • Intuit has announced the discontinuation of QuickBooks Desktop 2021 by May 31, 2024, and will stop selling certain subscriptions of QuickBooks Desktop after July 31, 2024.
  • Existing QuickBooks Desktop users face the choice of upgrading to a newer version, switching to QuickBooks Online, or exploring alternative accounting software.
  • While QuickBooks Desktop won’t disappear immediately, Intuit’s shift focus on cloud-based applications signals a shift away from supporting local applications.
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Is QuickBooks Desktop Being Phased Out?

This question has been sparked by two recent announcements from Intuit. Firstly, QuickBooks Desktop 2021 is to be discontinued from May 31, 2024. This includes all 2021 versions of QuickBooks Desktop Pro, QuickBooks Desktop Premier, QuickBooks Desktop for Mac, and QuickBooks Enterprise Solutions v21.

Intuit also announced plans to stop selling several QuickBooks Desktop subscriptions to new U.S. subscribers after July 31, 2024. 

This change affects the following products: 

  • QuickBooks Desktop Pro Plus
  • QuickBooks Desktop Premier Plus 
  • QuickBooks Desktop Mac Plus
  • QuickBooks Desktop Enhanced Payroll subscription. 

QuickBooks Enterprise solutions for desktop will not be affected.

Note that this differs from the service discontinuation of the 2021 versions of QuickBooks desktop. Users of the above desktop services will continue to be supported past July 31, 2024 and can keep renewing their subscriptions—it’s simply a “stop sell” of any new subscriptions after that date.

Indications of a QuickBooks Desktop Phase-Out

Intuit’s announcements regarding the future of the QuickBooks Desktop version have been fairly sparse on information. However, it’s worth noting that Intuit has been steadily discontinuing versions of Desktop as far back as 2018 (QuickBooks Desktop 2020 was discontinued on May 31st, 2023). 

So, it’s a reasonable assumption that future versions of Desktop will also be phased out on a rolling basis (similarly to how Microsoft no longer supports old versions of Windows).

Not only that, but Intuit has made it clear that the future of the QuickBooks system lies with their online version. Intuit’s Firm of the Future blog post published in November 2023 states:

 “We encourage you to consider QuickBooks Online because we have continued to innovate and improve on it. There are products that meet the needs of every client, from the simplest to the most complex. Additionally, all future innovation will happen in QuickBooks Online.”

Given the growing ease and flexibility offered by cloud-based services, it’s not surprising that Intuit is pushing its users to transition away from local applications. Moreover, the current set-up requires Intuit to maintain development teams and operational support for two separate software platforms (desktop and online).

In Intuit’s own words, “Intuit built an integrated, online platform because that’s the way innovative companies have transformed productivity, and because it helps provide the best time- and money-saving benefits. Simply put, an online platform can deliver benefits that a desktop product cannot. What’s more, our online products now meet the needs of almost all QuickBooks Desktop users.” 

Impact on Current QuickBooks Desktop Users

Unsurprisingly, these announcements have caused concern for business owners who are currently using versions of QuickBooks Desktop. Does this mean that every company currently using QuickBooks Desktop will need to transition to a new system? Not necessarily.

Let’s start with the discontinuation of QuickBooks Desktop 2021.

Intuit references this “service discontinuation policy” on its support site. This means that if you don’t upgrade your software by May 31, 2024, access to services including QuickBooks Desktop Payroll, live technical support, payment processing, Online Backup, and Online Banking will be cut off. 

While you will still have access to the 2021 system past this date, it cannot be linked to the wider Quickbooks ecosystem and you won’t be eligible for further security updates. This practice is also referred to as “sunsetting.”

Technically speaking, this means businesses that don’t require add-on services can continue to use QuickBooks Desktop 2021 past the discontinuation date. However, the lack of customer support or further security patches leaves your business highly vulnerable to data breaches or system outages you would have to handle on your own. Instead, it’s highly recommended to switch to another QuickBooks solution.

QuickBooks Desktop 2021 users can consider upgrading to a newer version of QuickBooks Desktop, like QuickBooks Desktop 2023 or 2024. Since Intuit is discontinuing older versions of QuickBooks Desktop on a rolling basis, getting a new version of the desktop software will ensure you are supported for a while longer.

This brings us to the more recent announcement by Intuit that new subscriptions of several QuickBooks Desktop products will not be available to U.S. subscribers after July 31, 2024. The most important thing to note here is that this change does not impact existing subscribers. If you take out a new subscription before this date, Intuit will continue to provide security updates and support (although the announcement doesn’t state how long this support will last).

In both scenarios, QuickBooks Desktop users have another option—switching to QuickBooks Online (QBO).

QuickBooks Online vs QuickBooks Desktop

Traditionally, online-only software apps come with some limitations, namely that they struggle to boast the same breadth of features and workflows as desktop software. However, the evolution of cloud-based software development has made it possible for online applications to not only match the capabilities of offline systems – but surpass them.

Because cloud-based systems allow for easy, real-time integrations, QuickBooks Online now offers a range of easy add-ons within the QuickBooks ecosystem that have either limited functionality on desktop or require additional fees for implementation. This includes QuickBooks time tracking, payroll services, live bookkeeping support, and more.

QuickBooks ProAdvisors can help businesses transition to QuickBooks Online and optimize the setup for specific business needs. Depending on the size of your company file, transferring over to QBO can take as little as an hour.

So, how does QuickBooks Online compare with QuickBooks Desktop?

Anywhere access vs. local access. With QuickBooks Online, checking on your customers, invoices, paychecks, and more from any smart device is easy. This is highly convenient for business owners who are always on the go or operate from multiple business locations. Because QuickBooks Desktop is locally installed, you’ll only be able to use it on that one device. This can raise access issues if the device is not easily portable.

Automatic vs. manual updates. Because QBO is a cloud-based platform, product updates, and security patches are applied automatically and don’t require businesses to remember to implement updates onto their device to access new features.

One-off vs. ongoing cost. The key downside of QuickBooks Online—and the reason why many small businesses are reluctant to make the switch— is that it’s only available via annual subscription pricing as opposed to a one-time purchase of the software. This needs to be factored into ongoing operational expenses, which may require a rethink of budgets.

QuickBooks Desktop Alternatives

Zoho Books

Zoho Books is a cloud-based accounting software solution that’s part of the wider Zoho business ecosystem. It allows small to medium-sized businesses to manage accounting, expense tracking, and automation of data entry and invoicing. With standard plans starting at $12, it’s a cost-effective option for businesses that need a basic accounting system. It also offers multi-currency support, making it suitable for businesses that regularly handle international transactions.

FreshBooks

Freshbooks is predominantly designed with small businesses, freelancers, and non-profits in mind that require a simpler invoicing and bookkeeping solution. In addition to a strong range of accounting and invoicing tools, FreshBooks offers a very user-friendly platform and reporting features that make it easy to keep track of outstanding payments. At just $13.75 per month for the most expensive premium plan, it’s one of the most affordable accounting software options out there. However, it does come with fewer customization capabilities.

Xero

Xero is an easy-to-use cloud-based accounting solution that offers a full toolkit of accounting and business management features, as well as fully customizable business reports such as chart of accounts and inventory. Because it offers an unlimited number of user seats on all of its pricing plans, Xero is a much better option for larger businesses and businesses that have an in-house team of CPAs than QuickBooks, which charges a high cost for more than five user seats. However, it’s important to note that Xero doesn’t have such a robust customer support system, with no live chat function available.

Sage 50cloud

Sage 50cloud, formerly known as Peachtree Accounting, is an accounting software solution designed for small and medium-sized businesses. Like QuickBooks, it’s a desktop-based system that needs to be locally installed and run off a designated device, though it does have cloud connectivity. This makes Safe 50cloud a good option for businesses who prefer not to transition to a fully cloud-based system.

Final Words

While QuickBooks Desktop version is not going away completely any time soon, Intuit’s shift to primarily cloud-based applications is going to have an impact on some businesses. Fortunately, business owners have several options on what to do next; they can upgrade to a newer version of QuickBooks Desktop, transition to QuickBooks Online (QBO), or have a fresh start with different accounting software outside of the QuickBooks ecosystem. 

The best option will depend on your business’s specific needs and budget, but it’s safe to say that a cloud-based system offers numerous advantages including better accessibility, seamless integrations, and more room to scale.

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Quick FAQs about QuickBooks Desktop Ending

Q: What is happening to QuickBooks Desktop 2018?

Intuit has officially cancelled the QuickBooks Desktop 2018 software in 2021, and will discontinue critical security updates for the software starting from June 1, 2021. Intuit also plans to stop providing support services such as Online Banking, Desktop Payroll Services, Live Support, and Online Backup.

Q: How can users ensure their data is protected after the discontinuation of QuickBooks Desktop 2018?

To protect their data and maintain access to essential features, users will need to switch to a newer version of QuickBooks like QuickBooks Online. As part of the upgrade process, Intuit will help users protect their data by ensuring a smooth transition between the software versions.

Q: Should users switch to QuickBooks Online, and what advantages does it offer?

Yes, users should consider switching to QuickBooks Online since it provides increased functionality, efficiency, and convenience compared to QuickBooks Desktop. QuickBooks Online is a cloud-based platform accessible through a web browser, integrates with platforms like Stax, and offers unique features like smartphone access, uploading receipts through a phone, and faster reconciliation.

Q: What is the difference between QuickBooks Online and QuickBooks Desktop?

QuickBooks Online is cloud-based, meaning it can be accessed from any device with an internet connection. In contrast, QuickBooks Desktop is installed on a specific computer and can only be accessed from that machine. In terms of costs, QuickBooks Online operates on a subscription model with a monthly fee, while Desktop has a one-time purchase cost with an optional annual subscription for additional services like customer support.

Q: Which is better: QuickBooks Online or QuickBooks Desktop?

For smaller businesses or those needing anywhere-access, QuickBooks Online is often more suitable. For larger businesses with more complex accounting needs, Desktop might be better. That said, it all boils down to your needs and preferences. If regular access from various locations or integration with other cloud-based apps is important, QuickBooks Online is the better choice. Meanwhile, for those who prefer a one-time purchase, Desktop is more suitable.

 

You Might Also Like: Pro and Con Review of Quickbooks Online (QBO)

Xero vs QuickBooks Online: Which Accounting Software is Best for Your Business?

Most small business owners hunting for cloud accounting software will find themselves trying to choose between the two most popular names: Xero and QuickBooks Online. These two giants in the small business accounting software space are equally adored in the business community.

Examining reviews of Xero vs QuickBooks Online can often lead to more confusion. Both are comprehensive tools that tick all the foundational boxes. So how do you know which accounting solution is actually better?

TL;DR

Xero and Quickbooks are two of the most popular cloud-based accounting platforms. Both solutions offer a variety of features that small businesses need to run accounting, but notable differences are:

  • Xero’s plans generally provide unlimited users while Quickbooks’ does not
  • Quickbooks enterprise offer is noticeably more robust
  • Quickbooks customer service is reachable via more channels
  • Xero‘s interface is designed for users with limited accounting experience

Online Accounting Software Basics

Accounting software is a must for businesses large and small. At its most basic level, these tools help you to track your earnings and expenses so that you can monitor cash flow, make accurate reports, analyze your financial data and optimize your efforts.

All of the accounting tools out there will meet that outline. It’s what they offer beyond that that helps you spot which is better for you.

If you’re a small mom-and-pop shop, your needs are going to differ significantly from a law office. The former will deal with purchase orders and ringing up sales at the register, while the latter will need capabilities related to invoicing and managing client records.

In reality, neither platform is necessarily better than the other. The stand-out platform will reveal itself only when assessed against your business needs. So let’s look at the platforms’ similarities and differences, what business needs they meet, and deduce which solution has the functionality you’ve been looking for.

Xero vs Quickbooks: Side by side comparison

Xero QuickBooks Online (QBO)
User Interface User-friendly, designed for limited accounting experience User-friendly, though may appeal more to accounting professionals
User Limit Unlimited users on all plans User limit on most plans (up to 25 users on the highest plan)
Pricing Plans Early ($15/mo), Growing ($42/mo), Established ($78/mo) Simple Start ($30/mo), Essentials ($60/mo), Plus ($90/mo), Advanced ($200/mo)
Integrations Over 1,000 third-party platforms 750+ pre-built integrations and well-established API for custom integrations
Payroll Integration Partnership with Gusto In-built features in QBO
Tax Tools Limited tax tools More advanced tax tools
Time Tracking Only in Established plan Available at every plan level
Project Management Available on standard plan Some features available on standard plan
Customer Support Online support 24/7, extensive resource portal Phone and chat support, but with limited hours
Inventory Management Basic features Basic features
Customer Ratings Consistently strong reviews, high ratings for ease of use and setup. Generally good, average rating 4 stars.

 

Xero vs Quickbooks: The Overlaps

Both QuickBooks Online and Xero are cloud accounting platforms. This means that you can access either from anywhere you have internet, including your phone. If you’re in a cab and remember you need to track time, this can be done via an Android or iOS mobile app. Both solutions have this feature.

They also both boast a huge range of integration options via third-party tools, monthly subscription plans, and add-ons for customization to fit a wide range of business needs.

These similarities are what make them both front runners for flexibility and ease of use. Let’s look at their differences.

Xero Features, Pricing, Pros, and Cons

Xero is a business out of New Zealand that established itself in the accounting software space with the goal to make accounting tasks more user-friendly and even enjoyable.

Xero’s user-friendly interface has set the standard in the accounting software sphere. This ease of use makes the learning curve low for customers and adoption of the platform extremely high.

Features

At any level, Xero offers a full range of accounting features, including:

  • Dashboard and reporting
  • Invoicing and quotes
  • Tracking receivables and payables
  • Purchase orders
  • Bank feeds
  • Bank reconciliation
  • Sales tax management
  • Inventory tracking and management
  • Fixed asset management
  • Contacts, smart lists, and file storage
  • Payment processor integration
  • Payroll via Gusto.

Integrations

Xero can integrate with over 1,000 third-party platforms. There are far too many to mention here, but some of the most beneficial integrations include:

  • CRM systems
  • Time tracking tools
  • Reporting tools
  • Ecommerce platforms
  • Email marketing tools
  • Point-of-sale systems
  • Inventory management
  • Debtor tracking.

Pricing

Xero offers three pricing plans: Early, Growing, and Established.

Xero Early

With Xero Early, you have access to all of the features above for only $15 per month. However, there are some usage limits:

  • Send 20 invoices and quotes
  • Enter five bills
  • Capture bills and receipts with Hubdoc
  • View a snapshot of short term cash flow and business health

Xero Growing

The Xero Growing plan will set you back $42 per month but gives you access to all the basics, plus unlimited invoices, quotes, bills, and you can reconcile bank transactions.

Xero Established

The Xero Established plan comes in at $78 per month and combines all of the Growing features plus:

  • Multi-currency
  • Project management
  • Expenses
  • Advanced analytics
  • Expense claiming

Xero’s Projects feature gives businesses the ability to track and bill for projects through the platform with features like time tracking, expense capture, and recording deposits against each project so that you can monitor the project’s performance. Billing is done directly from the project to keep project management and finance tightly connected.

Xero Expenses lets users—from mobile or desktop—track, assign, and manage business expenses, including capturing receipts, labeling expenses, and controlling permissions on who can view, submit, and approve them.

Pros

Unlimited users – One of the main ways Xero stands out against QuickBooks Online is in offering unlimited users. No matter which pricing plan you have on Xero, you can add an unlimited number of users to the account. That means your bookkeeper, accountant, tax advisor, and staff can all have access at no additional cost.

Integrations – Xero’s integration options are also superior to QuickBooks Online. Both offer a pretty significant number of integration options, but no accounting software comes close to Xero’s 1,000+ integration options.
Payroll – Companies in need of payroll will also find Xero the winner through its partnership with Gusto to give you full-service payroll integrations. The first two months with Gusto are free for Xero customers.

Customer support – Xero’s customer service is first class. Not only does it have an extensive resource portal online where customers can find answers to most questions, but it also offers free online support 24/7, regardless of plan level and timezone. All customer service employees are also Xero employees — no outsourced support.

Cons

Limited tax tools – Although Xero offers sales tax software, it doesn’t match QBO with the level of its tax tools. If you need tools to maximize tax deductions, manage 1099 payments, and create tax categories that can be auto-added to expenses, QBO may be a better option.

Limited time tracking – Xero only offers this feature on its highest plan, the Established tier. Comparatively, QBO offers time tracking at every plan level.

Customer ratings and reviews

“Xero is the best!” – 18th August 2021

Xero’s reviews are consistently strong, and it gets high customer ratings, such as:

  • 8.7 for ease of use
  • 8.1 for ease of setup.

Which Businesses Benefit from Xero Accounting Software?

Because of its interface, which is clean and easy to use, Xero has attracted a young market, particularly in the startup world. If you want a solution that has an extremely low learning curve, Xero is a great option.

Xero’s unlimited user offering is also a huge selling point for the platform. This feature makes it a strong solution for large and small businesses alike.

If you’re self-employed and don’t need to send more than 20 invoices a year, $9 per month is a great value. Similarly, if you’re a big business that requires 25 users or more, you’re going to save significantly with Xero.

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Quickbooks Online Features, Pricing, Pros, and Cons

QuickBooks Online (QBO) is a platform from Intuit that was designed to help businesses streamline repetitive tasks and processes, particularly when it comes to managing bills, invoices, time, and projects.

In the market for longer than Xero, QBO got picked up by accountants early and has established itself as the platform of choice for the industry. When your accountant is using the tool, it’s extremely convenient to have the same software.

Features

On any of the QBO plans, you can get access to:

  • Basic reporting
  • Income and expense tracking
  • Invoicing and estimates
  • Bank account connection and reconciliation
  • Tax organization tools
  • Accepting payments
  • Receipt capture and organization
  • Integration with QuickBooks apps and third-party platforms
  • Phone-based customer support.

Integrations

The number of QBO integrations are too many to list here, but they cover the most beneficial, such as:

  • CRM systems
  • Time tracking tools
  • Reporting tools
  • Ecommerce platforms like Shopify
  • Email marketing tools
  • Point-of-sale tools
  • Inventory management
  • Debtor tracking.

Pricing

QBO offers four different monthly subscription plans: Simple Start, Essentials, Plus, and Advanced.

QBO Simple Start

Simple Start costs $30 per month and covers all of the standard features above, as well as:

  • Importing transactions (from bank accounts, credit cards, PayPal Square, Stripe, and more)
  • Automatically sorts transactions into tax categories
  • Manual organization of income and expenses into tax categories
  • Accepting credit cards and bank transfers from invoices
  • Tracking invoice status
  • Send payment reminders
  • Automatically matching payments to invoices
  • Sales and sales tax tracking automatically on invoices
  • 1099 management and tracking
  • Track miles using your phone’s GPS
  • Run basic reporting, like profit and loss reports

QBO Essentials

The Essentials plan will set you back $60 per month and covers all of the above, as well as allowing you to:

  • Up to three users
  • Manage bills, track status, and record payments
  • Create recurring payments
  • Pay multiple vendors and bills simultaneously
  • Create checks from anywhere
  • Track employee time and billable hours
  • Automatically add time to invoices
  • Let employees enter their own time
  • Integrate with TSheets by QuickBooks
  • Detailed reporting available on a dashboard
  • Send estimates to your clients

QBO Plus

The Plus plan comes in at $90 per month, offering all the features we’ve discussed so far, plus:

  • Up to five users
  • Advanced reporting
  • Project profitability tracking
  • Purchase order creation
  • Vendor management
  • Job Costing to track labor costs, payroll, and expenses
  • Track inventory, goods costs, and low-stock notifications
  • Import inventory from Excel
  • Sync inventory with e-commerce tools
  • Create custom user permissions and assignments.

QBO Advanced

Finally, the Advanced plan, with a $200 per month price tag, offers all of the previously mentioned features and then some:

  • Up to 25 users
  • Accelerated invoicing
  • Smart reporting via Fathom
  • Enhanced custom fields for reports
  • QuickBooks priority care for premium customer support
  • Bookkeeping automation
  • Revenue recognition that allows you to automatically track deferred revenue
  • Financial planning tools that allow you to create and manage budgets
  • Automation of your common workflows

Pros

Plan Options – While QBO is more expensive for businesses that don’t need lots of functionality, it actually works out in providing better value for those who do. The QBO plans give businesses more options, and the structure of these plans considers the scale of businesses at each plan level.

Tax Tools – QBO trumps Xero with the power of its tax tools. While Xero has sales tax software, QBO has tools to maximize tax deductions, manage 1099 payments, and create tax categories that can be auto-added to expenses.

Time Tracking – QBO offers time tracking at every plan level, while Xero only offers it for the Established plan, the most costly pricing plan.

Cons

Limited Users – Even at the highest plan, QBO limits the number of users to 25. If you need to share access with many staff and outside financial support in bookkeeping and accounting, this is going to be a frustrating limitation.

Limited Customer Support – QBO does have phone support, but the hours are limited, so it’s actually not as flexible as Xero.

Customer Ratings and Reviews

“Solid platform for easy bookkeeping” – 24th August 2021

For the 2,600+ reviews QBO has, its average rating is 4 stars (out of 5) is still pretty good, with these ratings averaging:

  • 8.1 for ease of use
  • 7.9 for ease of setup.

Which Businesses Benefit from QBO Accounting Software?

QBO is really the more robust of the two accounting platforms, but it’s also the most costly. This means that it’s particularly suited to businesses that want to gain deeper insight into the logistics of their business as it grows.

The way the QBO plans scale up reporting capabilities at each level tends to match business needs at each growth stage, making it great for businesses that plan to scale.

QuickBooks vs Xero: Feature Comparison

Let’s take a look at how the two solutions stack up in a side-by-side feature comparison.

Ease of Use

Both solutions are known for their user-friendly interfaces. One crucial difference is that Xero is specifically designed for users who have limited accounting expertise.

Users

Number of users is where there is a crucial difference between Quickbooks and Xero. Xero allows for unlimited users on all plans. Quickbooks caps users on most, if not all, plans.

Analytics

For small businesses, Quickbooks and Xero offer similar analytics capabilities. However, because Quickbooks doesn’t devote itself solely to supporting small businesses, its reporting for large companies allows for a more in-depth financial analysis.

Invoicing

When it comes to invoicing, there is very little difference in the solutions’ offerings. Both Xero and Quickbooks provide invoicing templates, recurring invoices, online payments, automatic invoice reminders and more.

Payroll

Overall, Xero and Quickbooks have similar offerings when it comes to payroll, offering automatic payroll calculations, direct deposit, leave management, employee self-service, and more.

Inventory Management

Neither Xero nor Quickbooks is an inventory management solution, so if you’re looking for a robust system, you should look for something specialized. That said, they both do offer basic inventory management features that enable a business to track inventory, make adjustments, and even place purchase orders for new inventory.

Project Management

While both solutions have project management offerings that are quite similar at the advanced tier, Xero offers these features on their standard plan while Quickbooks only offers some of its project management features on its standard plan.

Integrations

Both solutions have robust ecosystems of third-party integrations. That said, Quickbooks has an edge here. They have 750+ pre-built integrations compared to Xero’s 500+. They also have a well-established API for custom integrations, while Xero is continuing to expand its capabilities.

Customer Support

It’s worth noting that Xero provides help through email and an online help center, while Quickbooks also offers phone and chat support.

Ultimately, for small businesses, there isn’t a huge amount of difference in the key features between these cloud-based solutions. They’re both popular accounting software tools for good reasons.

QuickBooks vs Xero: Both Solid Solutions When it Comes to Accounting Software

QuickBooks and Xero are both strong contenders in the realm of small business accounting. The right solution depends on your (or your accountant’s) preferences and specific needs.

Regardless of which software you choose, know that Stax can easily connect with both. Our direct integration with QuickBooks enables you to connect your accounting software with Stax’s payments platform. If you’re using Xero, you can connect Stax through Zapier with just a few clicks.

If you need help sorting out your payments and accounting integrations, get in touch with the Stax team and we’ll help you figure out the right setup for your business.

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FAQs about Xero vs QuickBooks

Q: What is the difference between Xero and QuickBooks?

The primary differences between Xero and QuickBooks are:

  • User Interface: Xero is designed for users with limited accounting experience, whereas QuickBooks has a user-friendly interface but is also well-suited for those with more accounting knowledge.
  • User Limit: Xero offers unlimited users across all its plans, while QuickBooks has a user cap on most plans, going up to 25 users on its highest plan.
  • Pricing and Plans: Xero’s plans are Early, Growing, and Established, with prices ranging from $15 to $78 per month. QuickBooks offers Simple Start, Essentials, Plus, and Advanced plans, ranging from $30 to $200 per month.
  • Tax Tools and Time Tracking: QuickBooks provides more comprehensive tax tools and time tracking on all plan levels, whereas Xero has limited tax tools and offers time tracking only on its highest plan.
  • Integrations: Xero integrates with over 1,000 third-party platforms, while QuickBooks also offers a wide range of integrations but with a focus on deeper financial analysis for larger companies.

Q: Why do accountants use Xero?

Accountants use Xero because of its user-friendly interface, making it accessible to clients with varying levels of accounting expertise. Its ease of use, comprehensive feature set, and extensive integration options make it a versatile tool for accountants managing the accounts of diverse clients.

Q: Do accountants prefer QuickBooks?

Many accountants prefer QuickBooks, especially in the U.S., due to its advanced features, robust tax tools, and scalability. QuickBooks has been a long-standing favorite in the accounting industry, and its detailed reporting and analytical tools make it suitable for more complex accounting needs.

Q: Do I still need an accountant if I use Xero?

Yes, using Xero doesn’t eliminate the need for an accountant. While Xero simplifies many accounting processes and is user-friendly, an accountant’s expertise is invaluable for complex financial decisions, tax planning, compliance, and optimizing your financial strategy.

Q: Do I need a CPA if I use QuickBooks?

Yes, even if you use QuickBooks, a Certified Public Accountant (CPA) can be crucial. A CPA can provide expert advice, ensure compliance with financial regulations, help with tax filings, and offer strategic financial planning, which goes beyond the scope of what QuickBooks can automate.

Q: What is easier to use, Xero or QuickBooks?

Ease of use can be subjective and depends on the user’s background. Xero is often cited as easier for individuals with limited accounting experience due to its intuitive interface and straightforward design. QuickBooks, while user-friendly, is known to have a steeper learning curve but offers more advanced features, making it a preferred choice for users with more accounting knowledge.

How Adopting Mobile Payments Can Help Your Business Grow in 2024

Let’s time travel back, just 20 years ago, to the shopping mall. You’re making a purchase at a retail store, and the cash register is large, clunky, and painfully slow, even for 2004. 

Fast forward to now where much has changed, and research anticipates contactless mobile payments to exceed one billion users globally by 2024. Customers can pay with their watch or phone just by tapping it on a card reader, and businesses can host an entire POS system on a mobile phone. A lot has changed in 20 years, and businesses must either adopt a modern and mobile payment infrastructure or risk becoming about as relevant as the cash register in a mall department store.

So how can you adopt mobile payments for your business, and how can you benefit from these payment services? Thanks to the advancements in payment technology, the answers are not difficult to find. From hardware equipment to specialized merchant services, here’s how you can use mobile payment services to grow your enterprise this year.

TL;DR

  • Mobile payments have evolved significantly over the past 20 years, with current tech enabling payments through watches or phones. 
  • Major companies like Apple, Samsung, and Google have championed mobile payments through NFC-enabled digital wallets; businesses need compatible hardware for adoption. 
  • Adopting mobile payments is crucial for modern businesses to cater to broader audiences, streamline the checkout experience, and ensure operational relevance in the future.

Learn More

Upgrade Your Legacy Equipment for Mobile Payments

The world’s foremost mobile phone manufacturers, Apple and Samsung started to foster the use of mobile payments as early as 2014 and 2015, respectively. By using near-field communication (NFC), Apple Pay, and Samsung Pay services turned each company’s mobile devices into highly secure digital payment wallets. Google was a little late to the party, but it also followed with its method called Google Pay in 2016.

Thanks to these modern payment solutions, credit card, and debit card users can now complete their purchases without swiping or inserting their cards at the point of sale (POS) terminals. Instead, they can tap their mobile devices against supporting POS terminals to process their payments securely and efficiently by way of a digital wallet.

Why Is Adding Mobile Payments Important to Businesses Today?

Contactless payments are quickly gaining traction among users, and it’s not just younger generations and tech-savvy consumers. Major card issuers such as Visa, MasterCard, and American Express each have hundreds of millions of NFC-enabled (near-field communication) debit and credit cards in circulation. Further, the adoption of various digital wallet app options—including Apple Pay, Google Pay, Samsung Pay and Google Wallets—make accepting mobile payments a must-have for modern businesses.

Due to its simple yet effective way of making mobile payments, this method is one that is rapidly growing. Many enterprises are now focusing on making it a part of their checkout experience, whether they offer retail services or run other businesses in specific industries. With the promise of increased sales and a better reputation, it seems like it is par for the course to adopt a mobile payments solution.

But even as the adoption of tap-to-pay increases, contactless card and digital wallet payments through Apple Pay, Samsung Pay, and Google Pay need compatible hardware to work at POS terminals.

What Can You Do to Adopt These Mobile Payments Solutions?

Contactless payments are relatively new, only arriving in the U.S. in 2014. Because of this, outdated POS systems lack the ability to accept NFC-enabled credit and debit cards or mobile wallets. So, for businesses working with antiquated POS terminals, now is the time to upgrade to be able to better serve a wide swath of users with contactless cards and mobile wallets.

But not to fear—with the help of your payment processing partner, you can easily modernize your infrastructure and make sure your business is equipped to offer the latest payment processing hardware. So, if you’re operating with older hardware that only accepts EMV chip cards and swiped credit and debit cards, it’s time to talk to your payment processor and enter the modern era. Not only will this be a more secure option and allow for more efficient transaction processing, you’ll also deliver a better customer experience.

How Can Mobile Payments Help?

By accepting these mobile solutions, your business can cater to a broader customer base that now prefers using mobile payments. Accepting mobile payments streamlines the checkout experience for these customers, leaving them with a good impression of your business. After all, especially with a younger generation of patrons expecting modern technology, businesses not only need to but also benefit from meeting their customers where they are.

In the long run, this also future-proofs your operations for when these mobile solutions become the primary way to process payments. Instead of upgrading your payment infrastructure at the last minute, you can benefit from modern merchant services that will take on the challenge of changing times.

Use Card Readers to Turn Mobile Devices into POS Equipment

If the above information tells you anything, it’s the importance of modern payment terminals, including mobile POS systems that complement standard POS terminals. . But what if your business sells its services in the field? That’s where you can turn to mobile payment systems. There are many options available that plug into existing smartphones and tablets , such as the Swipe Simple B250 Reader available from Stax, to solve this problem effectively.

Some mobile card readers attach to modern smartphones or tablets to turn them into payment card processors, and some work on their own as separate devices. This means that these compact devices can work anywhere your customers are or wherever your services can go.  A standalone mobile point-of-sale system, such as the Clover Flex or Dejavoo QD Series are great options for dedicated mobile payment transactions.

Offering mobile payment options is attainable for small businesses and large enterprises alike as well. These compact options are compatible with Apple, Android and other smartphones and have the full functionality needed to process payments in the field.

Leveraging Peer-to-Peer Payments

One trend gaining traction with mobile payments is the use of applications such as PayPal and Venmo for more than peer payments. Many businesses, particularly small businesses, are using mobile payment apps to allow their customers to leave their physical cards at home and submit payments directly from their Venmo, Cash App or PayPal account to the merchant, and the funds are then transferred to the merchant bank account. Because the customer already has their bank account, debit card or credit card information connected to the payment app, the payment can be completed easily within the familiar payment app ecosystem, creating a seamless user experience.

While the fee structures for this service vary depending on the provider, peer-to-peer (P2P) payments are much more than money transfers between friends. There are also several authentication measures, such as verifying the phone number of the recipient or using a QR code to validate that funds are being transferred to the correct account. 

How Mobile Payments and Online Payment Options Intersect

For businesses doing business both in-person and online, you’ll find a lot of the widely used payment technology intersects. From a user experience perspective, making an online payment where all of your information needs to be entered manually is a huge hassle. 

Many modern businesses now accept mobile wallets when processing an online payment, meaning the customer can simply click to pay, with all their shipping and payment information automatically populated. Not only is that easier for the customer, but it is also more secure than traditional payments as all mobile wallet payments use tokenization to secure the payment information—meaning the customer doesn’t physically enter their card information into a browser to complete a purchase. 

This is the same technology as accepting digital wallet payments in person, so for businesses that implement standard POS and mobile payment options for in-person transactions and also do business online, you can serve all of your customers using the same payment technology.

How is This Relevant to Your Business?

With well-received trends such as pop-up stores and food trucks, businesses have found a lucrative model in mobile operations. Instead of waiting for customers to come to brick-and-mortar stores, you can now take your services to them. This increases your exposure and your ability to sell, while also cutting infrastructure costs. It’s a win-win situation from every aspect. It also applies to employees who deliver services through field services and delivery.

To go even further, the various types of mobile payments and NFC payments allow your business to move quickly and better service your customers. Mobile payment technology has come a long way in the last decade, not only in the NFC technology, mobile payment systems, and payment options available but also in its adoption by consumers of all ages. So, whether you’re reading this as a food truck owner, small retail business, professional services provider, or a multi-national large enterprise, mobile payments and digital payment trends are highly relevant to you.

What Can You Do to Adopt These Mobile Payments Solutions?

Mobile card readers are now supported by major credit card processors such as Visa, MasterCard, and American Express. This means that you can now get modern payment solutions quickly via credible merchant services providers.

To implement mobile payments—or any payments for that matter—the first step is to choose a trusted payment processing partner. Your payment processor has a huge impact on what you pay and the experience you and your customers have. Choose a processor with POS hardware and software relevant to your business and the ability to scale if and when your business grows. 

There is also a lot of research to do when evaluating options—it’s an important comparison to look at the cost and capabilities. At Stax, we want you to know how we stack up against the competition, which is why we frequently share a side-by-side analysis of our solutions compared to your other options. For more information, check out some of our comparison articles.

Now, let’s assume you made a choice you’re happy with and have all the equipment and software needed to process mobile payments. Educating your employees is the next hurdle to clear. Especially if the technology is new to your workforce, this is a make-or-break moment. Resistance to new technology can be a tough obstacle, so invest in training and make sure your employees are comfortable and well-versed. When your employees are on board, it’s far easier to get your customers accustomed to the new payment options.

Related Article: Your Definitive Guide to Mobile Payments

What is the Best Way to Use Mobile Payments?

One of the simplest ways to implement mobile payments is to turn your employees’ mobile phones and devices into credit card and debit card processors by using a plug-in card reader or accepting peer-to-peer payments such as Venmo or PayPal.

As a result, you can accept payment cards and other payment types virtually anywhere you sell your products and services. Mobile card readers can also cut through the time it takes for them to accept payments for a sale or after delivering a service. To add to their advantages, some mobile card readers also help you in preventing cash tracking issues by connecting with your POS software.

Of course, another simple option is to upgrade your POS options to handheld mobile terminals and a payment processor that supports your business in more ways than hardware.

At Stax, our modern payment services focus on going beyond ordinary merchant accounts. The Stax Platform allows for mobile swipe capabilities through our Stax mobile app. You can also key in payments or add the optional mobile reader to start swiping. Enjoy the ease and convenience of sending invoices and storing payment methods through the Stax Platform.

Contact us at Stax for a custom quote today to learn how our solutions can help you keep up with mobile payments this year. We will be happy to help you find the right solution for your enterprise.

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FAQs about Mobile Payments

Q: What are mobile payments and how have they evolved over the years?

Mobile payments refer to payment services that are operated under financial regulation and performed from or via a mobile device. Over the past 20 years, mobile payments have evolved significantly, with advancements in technology enabling payments through wristwatches or smartphones. Major tech giants like Apple, Samsung, and Google have pioneered mobile payments through NFC-enabled digital wallets.

Q: Why is adopting mobile payments crucial for businesses today?

Adopting mobile payments is vital for modern businesses to cater to a wider audience, streamline the checkout experience, and ensure operational relevance in the future. With an increasing number of customers preferring contactless payments for their convenience and security, businesses need to adapt to this trend to stay competitive.

Q: How can a business adopt mobile payments?

The first step to adopting mobile payments is upgrading your current payment processing systems to be compatible with the latest NFC-enabled devices and digital wallets. This might involve partnering with a reliable payment processing provider and investing in modern POS hardware and software. It’s essential to train your employees on the new technology to ensure a smooth transition and positive customer experience.

Q: What are the benefits of adopting mobile payments for businesses?

Mobile payments can help businesses cater to a broader customer base, enhance the checkout experience, and future-proof their operations. By accepting mobile payments, businesses can also increase their sales, improve their reputation, and stay relevant in a rapidly evolving digital landscape.

Q: What is the role of card readers in facilitating mobile payments?

Card readers can transform mobile devices into POS equipment, enabling businesses to accept payments virtually anywhere. Some mobile card readers can be attached to smartphones or tablets, turning them into payment card processors. This offers a practical solution for businesses that sell their services in the field.

Q: How do mobile payments and online payment options intersect?

Many businesses now accept mobile wallets for online payments, providing a seamless and secure checkout experience for customers. The technology used for accepting digital wallet payments in person is the same as that used for online transactions, allowing businesses to serve their customers with the same payment technology across different platforms.

Q: What is peer-to-peer (P2P) payment and how is it relevant to businesses?

Peer-to-peer payments allow users to transfer funds directly from one party to another through their mobile devices. Many businesses, especially small ones, are leveraging P2P payment apps like PayPal and Venmo to provide customers with a seamless payment experience. This method is secure, easy, and efficient, making it a popular choice for modern businesses.

Q: How can businesses leverage mobile payments for growth?

Businesses can leverage mobile payments to enhance customer experience, streamline operations, and expand their customer base. By adopting mobile payments, businesses can also stay ahead of the competition, increase sales, and improve their reputation in the market.

Q: How do mobile payments impact businesses offering mobile services?

For businesses offering mobile services like pop-up stores and food trucks, mobile payments allow for quick transactions and better customer service. They also help increase exposure and selling ability while reducing infrastructure costs. The various types of mobile payments and NFC payments enable businesses to move quickly and service their customers more effectively.

Q: What is the future of mobile payments?

The future of mobile payments looks promising. With the continued advancement of technology and increasing consumer demand for convenience and security, it’s expected that mobile payments will become the primary way to process payments in the future. Businesses that adopt mobile payment solutions now are positioning themselves for success in this evolving landscape.


 

What is Electronic Invoicing and How Does it Work?

A key part that any business undertakes is sending out invoices. From SaaS services to healthcare, virtually every business has to send invoices to get paid.

In the past, your invoice process was probably entirely paper-based. It might have involved printing out physical invoices, mailing them off to a client, and waiting for them to confirm, pay, or send proof of payment. That doesn’t have to be the case anymore.

Over the last several years, electronic invoicing (or e-invoicing) has taken the invoice management game to the next level, streamlining workflows and simplifying the entire process. In fact, research shows that the global e-invoicing market was worth $8.74 billion in 2021 and is expected to reach $29.68 billion by 2027.

While there’s a growing trend shifting towards e-invoices, industry data shows that on average, accounts payable (AP) departments received over a third of their invoices on paper, despite a paper invoice error costing $53.50 to fix. Clearly, there’s still a way to go.

Want to learn more about all things e-invoicing? In this article, we’ll explain what electronic invoicing is (and isn’t), its benefits, and how you can successfully implement an e-invoicing solution.

TL;DR

  • Electronic invoicing (or e-invoicing/digital invoicing) is the process of billing your customer digitally or through the Internet, generally through structured data formats like XML or EDI. 
  • There are several reasons you might consider switching to e-invoicing, including lower costs, improved productivity, and fewer bottlenecks. That said, it’s important to ensure stakeholder buy-in and proper security.
  • To successfully implement e-invoicing, create a comprehensive strategy introducing the switch to e-invoicing, inform your customers well in advance, and focus on the benefits they’ll receive to drive adoption rates.

E-Invoicing and How It Works

Electronic invoicing goes by a few other names, including e-invoicing and digital invoicing. It’s the process of billing your customer digitally or through the Internet, instead of in-person or by mail.

However, the digitization of paper invoices is not the same thing as e-invoicing. If you take a photo of a paper invoice or use an app to convert it into a PDF invoice, that isn’t e-invoicing. If it wasn’t issued electronically and didn’t include structured data a machine can read or extract, it’s not an e-invoice.

E-invoicing has been around for decades, since the days of XML formats and electronic data interchange (EDI) for document processing and material procurement. Now, digital invoices are often prepared with billing software solutions, allowing customers to access their invoice data via their email or in an online environment. Most invoicing systems also let customers make payments through the portal.

Of course, like paper invoices, you need to include the same information on your e-invoice, including the customer and seller info, goods or services purchased, amount due, payment date, and invoice number.

Learn More

E-Invoicing Benefits

There are several reasons why you might switch to e-invoicing, including:

Overall convenience and improved productivity. Companies can avoid many hours of manual processing, using templates to quickly generate their invoice to send electronically and securely—wherever they are.

Automated and touchless invoice processing. Larger companies that regularly send recurring invoices can benefit from the automation functionality of e-invoicing, freeing up more time for their accounts payable department.

Early payments. Minimize the risk of late payments with paper invoices and improve your cash flow with quicker, streamlined payments updated in real-time.

Fewer bottlenecks. Manually adjusting errors on paper invoices costs time and money. With invoicing software, you can reduce the risk of human error and instantly make changes, all reflected instantaneously in your invoicing portal—i.e., your single source of truth.

Potential E-Invoicing Drawbacks

While the benefits of e-invoicing are quite clear, there are a few possible challenges you should keep in mind before you make the switch.

Ensuring stakeholder buy-in. Change can definitely be difficult, even if it’s for the best. If you have customers who are used to traditional invoicing, switching to electronic invoicing may take time and cause short-term frustration. If you’re struggling with getting everyone on board, check out our tips later in this blog to help overcome this challenge!

Ensuring proper security. Invoicing naturally means dealing with potentially sensitive data, so it’s important to not cut corners when it comes to e-invoicing! Make sure that your documents can be encrypted and securely stored in the cloud, and that the payment processing provider you work with offers the latest security standards, like PCI compliance.

How to Get Started with Electronic Invoice Processing

It can be hard to choose the right e-invoicing software for your business, but it’s important to take into consideration the needs of your department or company. Some general questions you should ask are:

  • What kind of functionalities and integrations do you need? How specialized should they be? Do their services comply with (inter)national standards for electronic data exchange, like EDIFACT or PEPPOL? 
  • Do you only need invoicing or accounting features, or also additional features such as project management?
  • How robust can the e-invoicing solution be, given your budget?
  • How scalable is the product? Will it be able to match your growth and needs over the upcoming years?

By taking the time to answer these questions, you’ll be able to choose the perfect invoice service provider for your needs.

How to Implement Electronic Invoicing Successfully

Once you’ve chosen a digital invoice provider, you’re only halfway there. After all, if your clients don’t make the switch with you, you’re back to square one. To make the transition process easy and seamlessly onboard your clients, here are some tips to take into consideration.

Create a comprehensive strategy introducing the switch to e-invoicing. If you’ve decided to go digital, it’s important to bring your clients alongside your thinking. This means you shouldn’t just send one update email and call it a day, but provide multiple opportunities for your customers to understand why you’re making the transition.

If you’re in healthcare and primarily bill individuals, you might consider creating an email, letter, and a short video with FAQs. If you’re in financial services and mostly invoice accounts payable departments, you could organize a webinar where they can speak to a representative about your new ERP system.

Whatever option you go with, make sure your messaging is consistent and straightforward.

Inform your customers well in advance of any changes. Old habits die hard, and expecting your clients to make a switch within a week is not only unrealistic but also poor customer service. For example, if you’re an accounting firm working with larger corporate clients, they may need to go through lengthy internal approval processes. By giving your clients enough time, you’ll avoid running the risk of them switching to a competitor providing paper invoices.

Focus on the benefits your clients will receive. Don’t only talk about why e-invoicing is a smart choice for your company. Instead, explain what’s in it for your customers.

  • How much time will they be able to save?
  • Will they need to contact customer service less frequently?
  • Will their data be more secure?

By answering these questions, you’ll be able to drive your e-invoicing adoption rates.

Provide incentives to your customers. Since you’ll be saving on costs once you switch to e-invoicing, consider allocating some of that budget to offering discounts. For example, you might offer a small discount on the next three invoices if customers switch to e-invoicing ahead of the final deadline. Alternatively, you could make a donation to a charity of the customer’s choosing on their behalf.

Avoid a “one size fits all” approach. While all your customers should be well-informed on your digital transformation towards e-invoicing, it might make sense to create a dedicated approach for high-value customers. Let’s say you’re a legal firm, and a small handful of clients account for over 70% of your revenue. If so, you could consider offering a 1-on-1 meeting with them to personally walk them through why you’re making the switch. This could be the manager of the accounts payable department or the CEO if it’s a smaller company.

Another option could be offering custom programs, where you accommodate certain requests your clients have, such as training sessions or deadline extensions. By recognizing the importance of your high-value clients, you’ll be more likely to keep them on board.

The Future of E-Invoicing

If you think you can get away with using traditional invoices for the foreseeable future, think again. E-invoicing is projected to have an annual growth rate of 25% between 2022 and 2029, reaching a market value of over $6 billion by 2029. Plus, more places are requiring it through a top-down approach. 

In 2014, the European Union, for example, put up an e-invoicing mandate that required all public sector bodies to accept e-invoices, so it’s not unlikely that the U.S. will follow suit to some extent down the road, with mobile-friendly alternatives becoming increasingly important. While it’ll definitely take some time to pick up in the U.S. and certain regions in the world, those who adhere to e-invoicing compliance will undoubtedly have a competitive advantage that will fuel their growth in the long run.

Wrapping Up

Adopting digital invoices can streamline your workflow, increase productivity, and save costs—all while providing an improved customer experience and staying ahead of the digital curve. With a little bit of time and effort, you can successfully implement electronic invoicing and keep your customers throughout the transition period.

Stax has an all-in-one payment platform that makes billing and invoicing simpler. We offer scalable e-invoicing solutions for each business, always with transparent pricing.

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FAQs about Electronic Invoicing

Q: What is electronic invoicing?

Electronic invoicing, also known as e-invoicing, refers to the process of billing your customer digitally, generally through structured data formats like XML or EDI.

Q: What distinguishes e-invoicing from digitization of paper invoices?

E-invoicing shouldn’t be confused with the digitization of paper invoices. If a paper invoice is scanned or converted into a PDF and issued, this does not constitute e-invoicing. To classify as e-invoicing, a bill must be issued electronically and must include structured data that a machine can interpret and extract.

Q: What are the advantages of e-Invoicing?

The advantages of e-invoicing include enhanced productivity, time-saving by avoiding manual processing, efficient and touchless invoice processing, and faster payments. E-Invoicing also reduces the risk of human errors and ensures all alterations are instantly reflected in the invoicing portal.

Q: What challenges might businesses face when implementing e-invoicing?

Switching to electronic invoicing can pose potential challenges like ensuring stakeholder buy-in and ensuring proper security. Stakeholders who are accustomed to traditional invoicing methods may resist the transition to digital invoicing. Furthermore, securing sensitive data involved in invoicing transactions is vital.

Q: How can a business implement e-invoicing successfully?

For successful e-invoicing implementation, businesses should create a comprehensive strategy to introduce the switch to e-invoicing. It’s also important to provide customers with ample notice of changes, highlight the benefits they stand to gain from the transition, and offer incentives to encourage adoption.

Q: What is the future of e-Invoicing?

E-invoicing is projected to have an annual growth rate of 25% between 2022 and 2029, reaching a market value of over $6 billion by 2029. More jurisdictions are starting to require it, indicating that its adoption will give businesses a competitive edge in the long run.

Q: What factors should be considered when selecting e-invoicing software?

Whilst choosing an e-Invoicing software, businesses should consider the needs of their department or company, the functionalities and integrations required, compliance with national and international standards for electronic data exchange, the software’s ability to match the growth and needs of the company, and the budget allocated for the solution.

Q: What information should be included in a digital invoice?

Like paper invoices, digital invoices should include customer and seller info, goods or services purchased, the amount due, the payment due date, and the invoice number.

Q: How does e-invoicing contribute to improved cash flow?

E-invoicing minimizes the risk of late payments associated with paper invoices and improves a company’s cash flow through faster, real-time updated payments.

Q: Does Stax offer an e-invoicing solution?

Yes, Stax offers an all-in-one payment platform that includes scalable e-invoicing solutions for each business, with transparent pricing.


 

The Best Free Accounting Software for Small Business in 2024

Running a small business often means wearing many hats—sending emails, paying suppliers, invoicing, crafting workflows, and building financial reports. All these are must-dos, in addition to actually delivering the job that customers or clients pay for.

Of all the extra tasks small business owners have on their plate, none are quite as important as accounting. Solid accounting practices keep your business in top financial shape and help you make better decisions while dropping the ball on accounting can cause business collapse or trouble with the IRS.

Thankfully, accounting systems with small business solutions are making it easier to outsource tasks to technology. These accounting tools help business owners track accounts receivable and payable, pay sales tax, and be amply prepared come tax time.

Here is your complete guide to what accounting software does for small businesses and why it’s so important.

TL;DR

  • Keeping track of your finances is critical, especially for small businesses with limited resources.
  • There are several free accounting software for small businesses with the option to upgrade to more advanced paid plans.
  • Whether you’re an independent freelancer or a growing business, there are many options to choose from for accounting software. The best practice is to evaluate your needs and choose the option that suits most requirements.

What Is Small Business Accounting Software Used for?

Managing business finances, as most small business owners will have experienced, is not as easy as it sounds. You need to budget, track expenses, pay suppliers, categorize transactions, and keep detailed, accurate books. Just a few days without updating your bookkeeping and the job becomes a mountain of work.

Accounting software makes life easier for small business owners. Instead of doing everything manually, you can put various to-dos on autopilot. In fact, industry data shows that nearly 75% of accounting tasks can be automated with software.

Most software also have easy-to-use interfaces, making it simple to carry out tasks like bookkeeping. Speaking of which, there can be some confusion between accounting software and bookkeeping software.

The Best Accounting System Small Business | Woman Using Business Software

Bookkeeping Software vs. Accounting Software

The easiest way to understand the difference is to think of bookkeeping as the basic and accounting as the advanced. Bookkeeping software is used for data entry and storage—e.g., logging revenue and expenses. The best bookkeeping software will make that process smoother than, say, a spreadsheet. You can run double-entry accounting: managing incoming and outgoing expenses and payments for better oversight.

Accounting software is like the upgraded version of bookkeeping software. Accounting software should have the same functionality—data entry and storage. In addition, it gives you more analytics and actionable accounting features, like forecasting and cash flow analysis. While there are certainly both free bookkeeping software and free accounting software options available, a low-cost accounting package for small business is likely to be a huge benefit to you in the long run.

Bookkeeping and accounting software both reduce the amount of time spent on data entry. Users can simply sync business bank accounts and credit cards. Automation takes uploading out of your hands. For the purpose of this article, we will focus on accounting software.

Why Accounting Software Is Important for Small Businesses

Oversight helps you to plan, spot potential issues, identify strengths, and prove business viability. With this information, you can confidently make investments, ask for loans, and predict what your tax requirements will be. When selecting a solution, it is important to review the different features offered in accounting packages.

Here are seven features that make accounting software so impactful for small business owners:

Bank and credit card syncing

Syncing your bank account and credit cards with your accounting software is the greatest timesaver that accounting software can give you. Removing manual input of financial data gives you back hours of your working life to focus on other important business tasks.

Invoicing

Invoicing software is an important feature of your accounting platform. It means that once the payment is made, it’s automatically registered as paid. With your bank and credit card synced, and your invoice logged as it’s sent out, your accounting system will pick it up once paid. No data entry is required from you once the invoice is sent. Most solutions will include templates.

Accounts receivable

By adding your invoices to your software solution, you are able to have a view of your accounts receivable. This means the amounts owed to the business. An overview of your accounts receivable is helpful for financial reporting.

Accounts payable

Accounts payable is essentially expense tracking: all of the invoices or expenses that the business is due to pay. Your accounting software can make it easier to manage these by putting them in the system. Adding due dates and having this chart of accounts easily viewable helps you prioritize payments and not let any fall through the cracks. Registering this information also allows you to assess your profitability based on your incoming and outgoing payments.

Online payment collection

Most accounting software tools will have features that allow you to collect online payments from customers. This makes it easier for customers to pay their bills, which helps you secure payments in a timely manner.

Shared access

There are a few benefits to shared access that are both within and outside of your organization. Internally, you can share access with any team members who may send invoices to clients or are responsible for paying company bills. Outside of your business, you can share access with your bookkeeper, accountant, and tax professionals to make their life easier, saving them time and saving you money that would have been spent on their time.

Financial statement preparation

Your accounting software can help you easily prepare balance sheets, profit and loss statements, and cash flow statements. With all of your financial data in one system, the analytics capability lets you create complex reports quickly.

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Factors to Consider when Choosing Accounting Software for Small Businesses

There is quite a broad range of accounting software solutions available to small businesses. What industry you’re in and how many employees you have will determine what features you need, but it’s also important to consider the following.

Ease of use

Yes, the features matter, but if you can’t figure out how to use the system, you may not get the greatest benefit from it. If you need a system that’s user-friendly, it’s important to assess this before selecting your solution. An integrated accounting software that will work directly with your CRM or project management software may be a helpful tool for your business.

Accessibility

Most newer solutions offer cloud accounting, so they can be accessed anywhere through any device. Still, you’ll want to check if it’s mobile-friendly. Is there a mobile app? Does it work on both iOS and Android? Then, of course, does this matter to you?

Additional users

Additional users would include your internal staff. This is important if you have multiple people invoicing clients. It’s also important that the software enables access for your tax professional or accountant, which is important come tax time.

Scalability

Adding all of your financial information into your accounting software is a time-consuming process. There is a level of commitment that comes with that, and it’s likely you won’t want to change once you have a system in sync with your finances. For this reason, it’s really important that you find an accounting solution that will remain viable if you’re planning to grow your business. Look for those that have upgrade options and no limits on features.

Integrations

At a minimum, most businesses will probably want to integrate their accounting software with their payment processor and POS system. If you can integrate with your POS, all of those bank transactions can be added in real-time automatically. Other helpful integrations include payroll services, CRMs, and more.

Features

Before you even look at accounting software options, it’s worth making a list of what features you need. Do you need unlimited users? Multi-currency? Inventory management? Built-in payment processing? Software integrations that connect with existing products? With your list, you can better qualify which solutions cover your accounting needs.

User reviews and trustworthiness

Our preference has been for companies that have received the most favorable customer service reviews from consumer-generated websites.

How Much to Budget for Small Business Accounting Software

What you spend will depend on what you need. If you’re a retailer, e-commerce business, or restaurant with complex inventory requirements, your budget is going to need to be higher to meet all those needs. If you’re a services provider, such as a software development business, with just a few full-time staff and fairly straightforward incoming and outgoing payments, your budget would be lower.

While pricing is definitely a factor to consider, it’s more important to weigh up what value the solution will give your business. Accounting software does bring an inherent value that improves your profitability. Pricing shouldn’t be the only deciding factor.

Most accounting software subscription fees are under $20 per month and then increase with add-ons.

Best Free Accounting Software for Small Businesses

For small businesses looking for a free version of accounting software solutions, the good news is you’re in luck. Here, we’ll discuss the top free accounting software solutions for small businesses.

Wave Accounting

Wave Accounting is a comprehensive suite of financial tools that work well for freelancers and small businesses. Wave is known to have an easy-to-use interface some features that are completely free, and other options that can be enabled for a monthly cost.

Features

  • Invoicing and accounting available for free

Wave Accounting offers basic invoicing and accounting for free with many other advanced features available at pay-per-use or monthly/annual fees that can be added as your business grows—keep reading for more information on Wave’s paid features.

Pricing

Only Wave Accounting’s invoicing and accounting features are available for free. More information on Wave’s paid plans is listed below.

Pros

  • Transparent pricing and useful free options
  • User friendly
  • Made for small businesses

Cons

Limited options with the free version.

Zip Books

Zip Books is a feature-rich accounting solution that supports double-entry accounting, invoicing, and financial reporting. While this works well for small businesses, it also scales for larger businesses. Like most free accounting software solutions there is an entry-level free version and other options for more advanced features.

Features

  • Double-entry accounting
  • Invoices
  • Expense tracking

Pricing

The basic packages allow businesses to send unlimited invoices, manage vendors and customers, accept digital payments, and view basic reporting. Paid plans start at $15 per month and custom pricing is available for more in-depth accounting capabilities. 

Pros

  • Advanced accounting capabilities are available
  • User-friendly interface

Cons

Most advanced features are not available for free.

GnuCash

Unlike most of the other accounting software for small businesses, GnuCash is an open-source option that can work for both personal and small business use. GnuCash follows double-entry accounting principles and offers many extensive features.

Features

  • Double-entry accounting
  • Income and expense tracking
  • Invoicing

Pricing

GnuCash is a completely free, open-source accounting software.

Pros

  • Open-source and community-supported
  • Full accounting functionality
  • Reports are customizable

Cons

There will be a learning curve for new users on this Linux-based software, so if an easy user experience is a top priority, this platform may be challenging.

Zoho Books

Zoho Books is a part of the Zoho suite and is a free version suitable for small businesses. Features include invoicing, expense tracking, bank reconciliation, and integrations/upgrades with other Zoho products.

Features

  • Invoicing (up to 1,000 per year)
  • Online and offline payments
  • Customer portal
  • Scheduled reporting

Pricing

Outside of the free option, Zoho Books has paid plans starting at $15 per month for the standard package, ranging to $240 per month for more advanced features and functionality.

Pros

  • Integration with other Zoho products and available upgrades
  • User-friendly interface
  • Cost to upgrade to more functionality is affordable

Cons

Limited options available with the free version.

Xero

While most of Xero’s functionality comes with a subscription, they do offer a free 30-day trial with full access to their suite of products. Zero is an accounting software targeted at small businesses.

Features

  • Invoicing
  • Expense tracking
  • Advanced financial reporting
  • Inventory management capabilities

Pricing

Standard pricing after the trial period starts at $13 per month for basic capabilities and goes up to $70 per month for the full suite of features. Currently, Xero is running a promotion that ranges from $3.25 per month to $17.50 per month for the first three months.

Pros

  • Robust accounting features 
  • Financial reporting
  • Affordable paid plans are available after the trial period

Cons

Only free for the 30-day trial period and full features are only available with the top paid plan.

Manager

Manager is a desktop-based accounting software suitable for small businesses. It provides invoicing, expense tracking, and financial reporting capabilities.

Features

  • Invoicing
  • Expense tracking
  • Financial reporting

Pricing

Manager is a completely free software solution downloaded to your computer. They also offer a cloud-based option with additional functionality for $49 per month.

Pros

  • Full accounting functionality
  • Offline access 

Cons

Requires computer installation for the free version, cloud-based option comes with a cost.

NCH Software

NCH Software is a professional business accounting software that offers invoicing, accounts payable, and basic reporting.

Features

  • Invoicing
  • Expense tracking
  • Works for Windows or Mac

Pricing

NCH Software is free for very small businesses with fewer than five employees. Other options available for purchase range from about $10 per month to $50 per month if paid software add-ons are bundled together.

Pros

  • Simple interface
  • Customizable, with additional features available for purchase

Cons

Only suitable for very small businesses with the free version.

TrulySmall

TrulySmall is an accounting software for small businesses, entrepreneurs, and freelancers that offers a free trial, and paid subscriptions for a small fee.

Features

  • Invoicing
  • Free mobile app
  • Free templates

Pricing

While TrulySmall has a free trial, other paid plans range from $9 to $20 per month, making it affordable for even the smallest of businesses.

Pros

  • Built specifically for small businesses
  • Chat customer support
  • Multiple currencies are accepted

Cons

Only free for a trial period with limited functionality.

Best Paid Accounting Software for Small Businesses

Got room in your budget for paid software solutions? 

Here are the best small business accounting software solutions to explore:

Quickbooks Online

Quickbooks Online, by Intuit, has long been the favorite accounting software used by small businesses, as well as bookkeepers and tax professionals. Quickbooks Online accounting software is cloud-based, accessible via desktop and mobile apps, from wherever there is an internet connection.

Features

  • Inventory management
  • Time tracking
  • Budgeting
  • Additional users (Essential and up)
  • Customizations (Essential and up)

All plans allow integration with third-party apps such as Stripe or PayPal. QuickBooks Online’s app store breaks down all of its apps by function and provides helpful examples of the benefits of each app.

Pricing

Quickbooks Online offers a 30-day free trial and four subscription plans thereafter: Simple Start ($25 per month), Essentials ($40 per month), Plus ($70 per month), and Advanced ($150 per month).

Pros

  • Integration with third-party apps, including Stax for payment processing
  • Cloud-based
  • Scalable
  • Mobile app
  • Favored by accounting professionals

Cons

Upgrades are required for additional users

Xero

Xero is an accounting software provider that has a first-class, user-friendly interface to make actions as intuitive as possible. It’s a rather simple system, which is perfect for smaller businesses that just need a sturdy, cloud-based solution with third-party app integrations that can build out the capabilities of the platform.

Features

  • Invoices
  • Quotes
  • Bills
  • Bank reconciliation
  • Multi-currency (Established)
  • Expense management (Established)
  • Project costing (Established)

Pricing

Xero offers a 30-day free trial and a promotion for 50% off for two months. Afterward, there are three monthly subscription options: Early ($11 per month), Growing ($32 per month), and Established ($62 per month). They also offer a full-service payroll option through Gusto, which is $39 per month, on top of the subscription cost and attracts a further $6 per employee.

Pros

  • Integration with third-party apps, including Stax by Fattmerchant for payment processing
  • Can collect payments online through Stripe and GoCardless integrations
  • Payroll integration with Gusto
  • Third-party app marketplace
  • Cloud-based
  • Mobile app
  • Simple inventory management

Cons

  • Limited reporting
  • Limited customer service
  • Fees for ACH payments

Another notable mention is Sage 50cloud. Sage has been around for a long time and works well for established businesses that need generous customizability. Unlike other solutions mentioned, Sage is Windows only. But its integration with Microsoft 365 makes it a hybrid solution: It’s hard-drive-based but shares information, via the cloud, with other applications. If you’re a Windows user with high customization needs, Sage could be a good option, but it has a very involved setup process, and it’s not very user-friendly. Hence it’s just an honorable mention for us.

Best accounting software for freelancers and solopreneurs

For service-based freelancers and businesses, the following high-value solutions could meet all your accounting software needs:

FreshBooks

FreshBooks is the most flexible solution for invoicing, suiting service-based businesses in particular. This solution really comprehensively covers bookkeeping needs and invoicing customizations.

Features

  • Send invoices
  • Receive payments
  • Print invoices
  • Pay invoices
  • Send proposals
  • Request deposits
  • Collect retainers
  • Track time

Pricing

Freshbooks has four plans: Lite ($6 per month), Plus ($10 per month), Premium ($20 per month), and Select, a customizable solution with pricing based on the customizations. The price for all plans can be discounted for businesses that pay annually (10% off). They also have a starter deal of 60% off each month for the first six months.

Pros

  • Cloud-based
  • Intuitive interface
  • Affordable
  • Third-party app integrations
  • Advanced invoicing features

Cons

  • No inventory management
  • No payroll service

Wave

Wave is another platform that suits service-based small businesses that don’t have inventory to track or need for payroll. It also has a free starter plan that covers most needs for freelancers, including easy reporting for accountants to prepare tax returns. You likely noticed Wave was mentioned on the list of free options as well. The free version offers several helpful capabilities, and the paid plans deliver more advanced features and better functionality. 

Features (of the free plan)

  • Unlimited collaborators
  • Unlimited bank and credit card connections
  • Unlimited invoices
  • Automated payment reminders

Pricing

Wave pricing starts at free. They do this because they make money through payment processing. For functionality such as payroll, the fee is $40 per month plus $6 per month per active employee or independent contractor paid. Advisory services start at $149 per month and additional accounting and payroll coaching is available for a one-time fee.

Pros

  • Great value

Cons

  • Limited features for bigger SMEs
  • Limited scalability

6 Best Accounting Apps for Small Businesses

Bookkeeping is an essential part of managing your business and it’s something you must oversee in order to remain profitable. Finding the best accounting apps can be overwhelming and difficult, as there are so many options to choose from. Thankfully apps are constantly making it easier to track and organize important data. Here’s a list of the six best accounting apps for your business.

Best Accounting Apps

FreshBooks

FreshBooks is a user-friendly accounting software that simplifies the bookkeeping process for your business. With beneficial features like time tracking, accounting reports, and expense tracking, you can efficiently manage your expenses and deviate from the dependence on Excel spreadsheets.

GoSimpleBooks

GoSimpleBooks allows you to concentrate on the larger aspects of your business so you don’t waste time focusing on time-consuming tasks. With an easy-to-use interface and automated math functions, GoSimpleBooks makes small business accounting much simpler for accountants managing small business finances, sole proprietors, and small companies.

Sage One

Sage One takes over the small, technical accounting tasks and automates them to save you time. This app can create and send invoices from your phone, record expenses as they occur, and enable you to view your entire business at a glance in their dashboard.

Sellsy Invoicing

Sellsy Invoicing is a great app for small business owners and freelancers alike. It helps you with automatically sending invoices, managing your products and services, and sending payment reminders. It also has communication features that allow you to chat with the rest of your team, send tasks, and maintain an agenda.

Nutcache

This accounting app is cost-effective and great for small businesses. Aside from the expected accounting features, Nutcache integrates with your favorite tools and even helps with project budgeting to avoid exceeding costs. It also offers invoicing, time tracking, and support for multiple languages.

FreeAgent

FreeAgent helps you make invoices for customers as well as manage your expenses and bank accounts. This cloud-based, accounting software automatically backs up your data so you don’t have to worry about missing information. It also features automatic bank feeds, timesheet reporting, and multi-currency invoicing to empower small businesses with their accounting needs.

Accounting is the backbone of every business and it’s something that requires careful attention. These apps will help you make the task of bookkeeping an easy, stress-free experience.

If you’re also looking for a simple solution to credit card processing, contact Stax and speak to a Payments Consultant to find out how you can stop losing money to markups and surcharges.

Getting the Most from Your Accounting Software

Whether you’re a business that transacts in person, manages inventory, or deals in project management, it helps to have a solution that integrates with your payment processor and POS. These integrations ensure your accounting solution is comprehensive, covering the entire breadth of your business’s financial requirements.

For that reason, Stax recommends Xero and Quickbooks Online. To learn more about comprehensive accounting software solutions, contact our team today.

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FAQs about Best Free Accounting Software

Q: What is the best free accounting software for small businesses in 2024?

There are numerous options for free accounting software in 2024. Some of the top-rated ones include Wave, Zoho Books, ZipBooks, Odoo, Brightbook, ProfitBooks, Manager, and GnuCash. Each of these platforms offers unique features catering to the specific needs of different businesses.

Q: Why should small businesses use free accounting software?

Small businesses typically operate on tight budgets, and investing in a free accounting program can save significant capital. Additionally, such software simplifies complex financial tasks, improves financial analysis, assists in invoicing and allows easier management of book-keeping and tax obligations.

Q: What features should I look for in free accounting software for small businesses?

Quality free accounting software can offer numerous essential features like invoicing, tracking time and expenses, integrating with a bank, financial analysis, and business reporting. Some of them even allow processing credit cards and managing bookkeeping needs.

Q: Is Wave recommended as a free accounting software for small businesses?

Yes, Wave is often mentioned as a top choice for free accounting software for small businesses. It receives high marks for its comprehensive offerings, user-friendly interface, and overall functionality.

Q: What are the top free invoicing solutions for small businesses?

Several free accounting software also includes invoicing solutions. Notable platforms include Zoho Books, ZipBooks, and Wave. These solutions make it easier for businesses to bill their clients and manage outstanding invoices.

Q: Can I use free accounting software for financial analysis for my small business?

Absolutely, several free accounting software options provide tools for financial analysis. Platforms like NCH are praised for their capabilities in this area, enabling businesses to understand their financial position better and make informed decisions.

Q: Is it possible to integrate bank accounts with the free accounting software?

Yes, most free accounting software for small businesses allow integration with bank accounts, enabling real-time tracking of income, expenses, and overall cash flow.

Q: Which free accounting software allows credit card processing for small businesses?

Certain free accounting solutions, like ZipBooks, offer a feature to process credit card payments, making it more convenient for businesses to handle transactions.


 

What is an eCheck and How Does an eCheck Payment Work?

When dealing with clients, accepting eCheck payments or electronic checks is an excellent way for business owners to make financial transactions more convenient. In the world of electronic payments, eChecks are a relatively new and increasingly popular payment option for both consumers and businesses. Today, millions of people in the U.S. prefer paying for goods and services with electronic checks over other modes of payment, including credit cards. As such, adding an eCheck payment option to your website’s checkout page helps increase sales.

But what exactly are electronic checks and how do eChecks work? In this article, we’ll take a closer look at these online payments, assess their benefits, and determine what your business needs to accept electronic checks as one of its payment methods.

TL;DR

  • eChecks are processed through the ACH network and are one of many types of payments falling under the electronic funds transfer (EFT) umbrella.
  • eCheck payments work in the same way as an ACH transfer, using the routing number and account number to transfer funds between accounts.
  • Using eChecks to accept payments can save businesses on payment processing costs as they are usually less expensive than a debit or credit card transaction.

What is an eCheck?

eCheck payments, or electronic checks, are a digital version of traditional paper checks, and they are rapidly gaining traction in the modern economy due to their convenience, security, and cost-effectiveness. eChecks are a secure payment method  that transfers funds from a customer’s checking account into a merchant’s bank account using a payment processor, but instead of writing the check out manually and sending it through the mail, you enter the details into a secure online form. This is considered a type of electronic funds transfer (EFT) where money is transferred from one financial institution’s account to another account electronically without the direct intervention of the bank’s staff. Electronic funds transfer methods are generally considered more secure than paper checks.

In the United States, eChecks are processed by the Automated Clearing House (ACH) merchant network, an electronic network that processes financial transactions between participating financial institutions like banks. Customers authorize ACH network transactions by signing a contract or using a website, allowing money to be transferred between bank accounts.

What Are Echecks And How Do Echeck Payments Work

How Does eCheck Payment Processing Work?

eCheck Processing is very efficient and consists of three steps:

  • Customer authorization: In addition to signing a paper contract or using an online form, customers can authorize electronic check processing transactions over the phone.
  • Payment set-up: Businesses set up both one-time payments and recurring payments through a payment processing system.
  • Confirming payment: After receiving all payment information, a business submits details through the Automated Clearing House ACH network system to withdraw funds from the client’s account and deposit them into the business’ account. The entire eCheck payment processing procedure usually takes three to five business days.

From the consumer’s perspective, eChecks work similarly to a traditional paper check. They are able to authorize a payment by providing the necessary bank account information, and the payment is initiated and processed by the banks involved. However, unlike a paper check, eChecks are entirely digital and require no physical handling or mailing of documents. This means that eCheck processing can be done much faster than a paper check, with the payment typically clearing within one to two business days.

How Long Does an eCheck Take to Process?

eCheck transactions are a type of ACH payment and transfer funds between bank accounts using the Automated Clearing House network. Using this form of digital payment the customer enters their bank routing number and account number for a direct debit payment to the receiving bank. This may sound an awful lot like an ACH transaction, and it is—but with a couple of differentiating details, including the processing time. 

The main difference between eCheck transactions and the ACH transfer form of payment is that an eCheck is a one-time transaction, whereas ACH payment can be set up for recurring transactions, such as automatic bill pay or direct deposit. If processed as a one-time transaction, eCheck payments may not have the customer’s bank account information saved, resulting in an additional 1-2 business day processing time on top of the standard 1-3 days for standard ACH transactions. 

How Long Does it Take for eChecks to Clear?

Because eChecks are reliant on the financial institutions for payment processing, they are limited to business days. That said, an eCheck will typically process or “clear” in five business days at the most, often sooner.

Learn More

What Type of Business Transactions Use eChecks?

Given the versatility of eChecks, many businesses and clients pay for products and services using electronic checks. These include both small businesses and big companies like PayPal that enable payees to purchase items with eChecks when the buyer doesn’t have a credit card or alternate source of funding attached to their PayPal account. This makes payment more convenient and encourages customers to use PayPal as their online payment method.

Electronic check processing allows a customer’s payment schedule to be simplified and streamlined via predetermined payment authorization with the payer’s bank account, which in turn leads to more overall bill payments than traditional one-off payments.

What are the Benefits of Accepting eChecks?

Because they are transmitted electronically, eCheck financial transactions are quicker, safer, and simpler than many other modes of payment. This results in several benefits for both businesses and their clients.

More convenient

Unlike traditional paper checks, a digital eCheck does not need to be deposited at a physical bank and processes nearly twice as fast as a paper check. In 2018, the National Automated Clearinghouse Association (NACHA) updated its guidelines to allow processors to offer same-day funding for customers.

One of the primary benefits of eChecks is their convenience. Because they are entirely digital, eChecks can be initiated and processed from anywhere with an internet connection. This means that consumers can make payments without having to physically visit a bank or mail a check, and merchants can receive payments without having to handle physical checks or wait for them to clear. This convenience can save time and reduce the administrative burden for both consumers and businesses. This is a big advantage for clients who need to make fast transactions.

Cost-effective

Processing fees for eChecks tend to be lower than credit card transactions. Because eChecks require no physical handling or mailing, they can be processed at a lower cost than paper checks. These cost savings can be passed on to consumers and businesses, resulting in lower transaction fees and processing costs. Instead of credit card networks, electronic check payments uses the Automated Clearing House (ACH) for processing transactions between participating financial institutions like banks. This eliminates the need for credit card interchange fees, resulting in huge savings for subscription-based businesses that accept recurring payments as well as businesses that accept large payments.

Transfers made by the ACH network also save money since they take place in batches, making them cheaper to process than wire transfers that move money from one bank account to another one transaction at a time.

Sustainable

Switching from paper checks to eCheck payments reduces the 3.6 million tons of greenhouse gas emissions and 67.4 million gallons of fuel expended in transporting paper checks. Not only does this result in additional savings, it also provides a way to show the public that your business cares about reducing its impact on the environment.

Businesses appreciate receiving eCheck payments because checking account numbers and financial institutions don’t change as often as credit card numbers. As a result, clients don’t need to update their financial payment information as often and cash flows in more regularly to the payee’s bank account.

Reversible

ACH transactions can also be reversed after being initiated, unlike wire transfers, making eCheck transfers more secure for clients. Coupled with the encryption and tokenization that eChecks use to prevent fraud and data theft, eChecks reduce the chance of a business getting a bad payment while securing client payment information.

Given all of these benefits, it’s no wonder that ACH use has been steadily rising. According to NACHA, 30 billion payments totaling nearly $77 trillion were processed in 2022 using the ACH network.

Security

Another benefit of eChecks is their security. eChecks are processed through the Automated Clearing House ACH network, which is regulated by the Federal Reserve and subject to strict security standards. This means eChecks are generally considered to be safer than traditional paper checks, which can be lost, stolen, or altered in transit. eChecks also provide a clear digital record of the payment, which can be helpful for tracking and reconciliation purposes.

Benefits Of Accepting Echecks

What are the drawbacks of eChecks?

While eChecks offer many benefits, there are also some potential drawbacks to consider. One of the biggest drawbacks of an eCheck payment is that they can be subject to processing delays and errors. Because eChecks are processed through the ACH network, they must follow strict processing timelines and procedures. If there is any missing or incorrect information, the payment can be delayed or rejected, which can be frustrating for both consumers and businesses.

Another potential drawback of an eCheck payment is that they may not be available as a payment option for all merchant services providers. While many payment processors now accept eChecks, some may only accept credit or debit card payments.

Finally, an eCheck payment may be subject to fraud or unauthorized transactions, just like any other form of electronic payment. Consumers should take care to ensure that they are only providing their bank account information to trusted merchants, and should monitor their accounts closely for any unauthorized transactions.

Overall, the benefits of electronic checks far outweigh the cons. If your business takes large credit card payments regularly and you are looking to reduce your merchant fees and increase your recurring payments, you may want to begin to collect eCheck payments.

What Do Businesses Need to Accept eChecks?

In order for your business to accept eCheck payments from a customer, you must first collect the client’s financial information, including bank account routing number and payer’s checking account numbers. This can easily be done by providing a secure form web page on your website for clients to enter their information. Other businesses obtain this payment information over the phone or in person with a paper form.

Your business will also need to sign up for an ACH merchant account to withdraw customer funds online via an ACH payment. When setting up this account, a business must provide:

  • Its Federal Tax ID Number
  • The name and address of the business
  • The number of years the business has been in operation
  • Transaction processing volumes
  • Bank account number information

What is an eCheck on PayPal?

For those using the payment solution PayPal, you may already be familiar with eChecks, even if you didn’t know it. With PayPal, users can add both credit and debit cards as well as linking their bank account to the platform. When using your bank account directly to receive funds or to send payment for goods or services via PayPal, you’re using an eCheck.

Because PayPal is a third-party payment processor and conducts their own security screening, processing time for eChecks is extended and can be as much as 5-7 days when using this service. In some cases, such as insufficient funds in the debit bank account, the funds transfer can take additional time because PayPal will try to debit the account again after three days. Additionally, new users and businesses on PayPal may be subject to further security screenings and authentication, which could further delay payment processing.

Increasing Your Payment Options with eCheck Payment

Adding eChecks as a payment option for your business services offers a safe and convenient way for clients to make financial transactions. Advertising electronic check options on your website helps attract customers and shows your company employs business practices that reduce waste and make payment easier.

In order to make this service as smooth as possible, make sure to choose a payment processor that supports the most popular payment methods in use today.

Stax is a highly-ranked payments platform designed to simplify your payments through subscription-style merchant services.

Contact us to see how we can help your business grow and thrive in the digital world with efficient payment processing. 

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FAQs about an eCheck

Q: What is an eCheck?

An eCheck, or electronic check, is the digital equivalent of a traditional paper check. They are processed through the Automated Clearing House (ACH) network and used to transfer funds from a customer’s bank account into a merchant’s bank account using an online payment processor. Customers input their check details into a secure online form rather than writing them out and sending them manually.

Q: How does an eCheck payment work?

An eCheck payment process typically involves three steps. First, the customer authorizes the transaction, which could be done through a paper contract, online form, or even over the phone. Second, businesses set up the payment, which could be a one-time payment or recurring payment scheduled through a payment processing system. Finally, after receiving all payment information, the business submits these details via the ACH network to withdraw funds from the customer’s account and deposit them into the business’s account.

Q: How long does it take for an eCheck to process?

An eCheck typically takes three to five business days to process. This is because eCheck transactions use the Automated Clearing House network to transfer funds between bank accounts and such transfers take place in batches, which can add to the processing time.

Q: Can businesses accept eCheck payments?

Yes, businesses can accept eCheck payments as one of their payment methods. To do so, they need to collect the client’s financial information, like bank account routing and checking account numbers, and register for an ACH merchant account for online fund withdrawal as an ACH payment.

Q: What are the benefits of using eChecks?

eChecks offer numerous benefits. They are quick, safe, and relatively easy to use. Unlike paper checks, eChecks are processed faster and do not require physical submission to the bank. Fee structures for eChecks are also typically lower than those for debit or credit card transactions, making them a cost-effective payment method. Besides, eChecks are also eco-friendly since they reduce the use of physical checks and consequently minimize waste.

Q: Are eCheck payments safe?

eChecks are generally considered safe. They are processed through the Automated Clearing House (ACH) network, which is regulated by the Federal Reserve and must adhere to strict security standards. These checks also provide a clear digital record for tracking and reconciliation, which offers an added level of security.

Q: What are the drawbacks of using eChecks?

While eChecks offer significant benefits, there are some potential drawbacks. For instance, eCheck payments can be subject to processing delays and errors because they must comply with strict procedures of the ACH network. If there’s any missing or incorrect information, payments can be delayed or rejected. Another potential issue is that eChecks may not be available as a payment option for all merchant services providers. Finally, they are also susceptible to fraud or unauthorized transactions, just like any other electronic payment.

Q: What is an eCheck on PayPal?

An eCheck on PayPal is simply a payment made using your linked bank account. When you receive or send payment for services or goods via PayPal using your bank account directly, you are using an eCheck. However, keep in mind that processing times for eChecks on PayPal can be longer than usual and may take anywhere from 5-7 days.

Q: Can businesses benefit from accepting eCheck payments?

Yes, businesses can significantly benefit from accepting eChecks. Because of their digital nature, eChecks offer faster processing times and lower transaction fees compared to traditional paper checks. They also allow for more efficient record-keeping and can be accepted from anywhere with an internet connection. Finally, with eCheck payments, businesses often encounter fewer issues with expired or reissued credit cards, which improves cash flow reliability.

Q: Are there any sustainability benefits for businesses using eChecks?

Yes, switching from paper checks to eChecks can significantly enhance a business’s sustainability credentials. This migration reduces the greenhouse gas emissions and fuel used for transporting paper checks, showing public commitment to environmental sustainability.


 

11 Easy Ways Businesses are Accepting Payments Online

When the world wide web became available to the public in the early ’90s, the growth of eCommerce and online shopping wasn’t far behind. With triple-digit growth seen annually since its emergence in the mid-1990s, online shopping now accounts for 13% of all U.S. retail sales.  Clearly, accepting online payments is no longer an option for your business—it’s a must.

One of the major benefits of accepting payments online is the ability to get paid faster and in some scenarios, expand your revenue outside your local area of business. For professional service businesses such as legal consultations or therapeutic services online invoicing lets customers and clients the ability to pay for your products and services from anywhere at any time.

Whether you’re currently transitioning your company to a digital format or you are interested in finding a more convenient approach to get paid faster, here are 11 ways your business can accept payments online.

Accepting Online Payments using Credit and Debit Cards

As a business owner processing payments using a credit card or debit card is most common. The process uses an ACH transfer (Automated Clearing House transfer) or the transfer of money electronically from the customer’s bank account through the ACH network to the merchant’s bank account.

These transfers don’t require a payment gateway to be processed (although you do need a merchant account). ACH payment transaction fees are usually lower than credit card processing fees and are charged either per transaction or at a flat rate. For scenarios where the card isn’t present, you can use its details to perform contactless payments via online or digital payment gateways.

Mobile Payment Processing

As payment technology continues to advance financial institutions are increasingly providing customers with the ability to use mobile phones for banking transactions. This increases your customer’s ability to pay for just about anything from anywhere. Accepting mobile payments saves time by allowing you to collect compensation right from your phone or tablet.

With additional payment processing methods such as Apple and Google Pay on the rise, cloud-based payments have become a necessity. Most credit card processors use cloud-based technology, so your data, as well as your customer’s information, is secure. In other words, mobile payments are secure, fast, and convenient.

eChecks Through ACH Process

An eCheck is simply a form of online payment. Money is withdrawn from the payer’s checking account through an electronic funds transfer (EFT). Funds are electronically withdrawn from your customer’s account, sent via the ACH network to the payee’s banking institution, and then electronically deposited into the payee’s account.

eChecks are one of the most popular types of recurring payments. Funds are verified within 24 to 48 hours of the transaction being initiated. Should the payer have the funds available in their checking/bank account, the transaction is cleared within 3 to 5 business days and the funds are moved from the payer’s account to the payee’s account.

Click to Pay Email Invoicing

Email invoicing is the exchange of the invoice document between a business and a customer in an integrated electronic format. Traditional invoicing is manual and tedious, often prone to human error resulting in increased costs and payment processing lifecycles for your business.

Email invoicing or electronic invoicing is an easy and safe way for businesses to send out online payment requests. With a simple click, your customers can open the invoice via email, input their preferred payment information, and pay you instantly.

With email invoicing, you’re also able to schedule payment reminders and recurring payment options for long-term customers.

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Recurring Billing

Also known as auto-pay, recurring billing means the customer has authorized the merchant to deduct payments for recurring goods and services each month from their bank account. Payments can also be made with a securely saved debit or credit card. Recurring billing and payments prevent late fees by processing payments on or before their due date.

Recurring billing is effective for a wide range of businesses. Not only does it decrease late or missed payments, but it also improves your cash flow and assists your business with long-term financial planning.

SMS Text Payment Requests

SMS payments (sometimes referred to as text to pay) allow businesses to request payments and for customers to pay for goods, services, or products via a text message sent from a mobile phone. With the SMS payment system, purchasers send a text message to pay for an item or service.

With a 95% open rate over email invoicing, sending customers SMS text payment requests minimize your turnaround time of getting paid and optimize the opportunity for your customers to pay using digital payment options directly from their smartphone.

Related Article: What is Text To Pay And How Can You Leverage It For Your Business

Contactless Payment Options

Industry data shows that global contactless card purchases are forecasted to hit over $10 trillion by 2027. 

This payment method is clearly here to stay, so if you currently don’t accept contactless payments, now is the time to upgrade your system. 

Offering contactless payment methods provides safe and efficient payment options for your customers. Outside of mobile payment solutions, there are various types of contactless payments, including touch-to-pay credit and debit cards, Apple Pay, Android Pay, Google Pay, Fitbit Pay that can be used via smartphone or smartwatch, as well as other contact-free devices.

Virtual Terminal

A Virtual Terminal is a web-based payment application that assists your business with sending invoices, scheduling future & recurring payments, and it securely saves payment information for customers with recurring charges. Fit for businesses that primarily operate over the phone, require online invoicing, or have recurring monthly memberships, virtual terminals incorporate your entire payment experience into one easy-to-use platform.

Built into your integrated payment platform a virtual terminal allows your business to accept a variety of online payment types including debit, credit, and ACH bank payments all from your dashboard.

Peer-to-peer (P2P) Payments

Peer-to-peer (P2P) payments refer to the transfer of funds between individuals or entities without the involvement of traditional financial intermediaries such as banks. These transactions are typically facilitated through digital platforms or mobile applications (like Zelle and Venmo) which connect users directly to initiate the transfer.

P2P payments offer a convenient and efficient way to send and receive money, eliminating the need for physical cash or checks. They are often used for various purposes, such as splitting bills, repaying friends or family, or making purchases from individuals or small businesses.

eCommerce Shopping Cart

eCommerce refers to internet-based stores selling goods and or services to customers. This online shopping network allows people to do business without the constraint of distance and time.

Simply put, once a customer has added items or services to their online shopping cart, they can go directly to the checkout page. There, they can pay with a credit or debit card, processing their payment digitally. This process allows your customers to complete their entire purchase without ever having to leave the business’s website.

Payment Gateway Plug-Ins

A payment gateway plug-in authorizes credit cards or direct payment processing for e-businesses, online retailers, or traditional brick-and-mortar stores with an online presence. Adding a payment gateway plug-in to your business website allows you to seamlessly process payments directly from your web store.

Adding a payment gateway plug-in is an ideal solution for businesses interested in selling goods and services online via an eCommerce store. Doing so makes purchasing quick and easy for customers and expands your client reach, expanding your business’s ability to generate revenue exceeding your local area.

How Can Stax Help Your Business With Accepting Payments Online?

Online payment solutions are crucial to modern business. Without them, you are unable to accept payment methods that are becoming an industry standard.

While card-not-present rates tend to be higher, with Stax you save more on the costs. Not only will your business have access to the wholesale card-not-present rates, but you’ll also gain access to the Stax Platform. This helps your business easily streamline payments, increasing flexibility in how you receive payments between in-store and online.

Whether it’s invoicing, recurring billing, pay by phone, contactless payments, or being able to receive payments through your website, Stax offers multiple online payment options that can help your business succeed.

10 Ways Businesses Are Accepting Payments Online

How to Accept Payments Online: 3 Simple Steps

Every business operating in this current day and age—whether brick-and-mortar or eCommerce—must do so in an efficient and effective manner. A core component of this new era is the speed and convenience of payments. Further, it is crucial for small business owners to be able to accept payments online.

Not only is it a requirement for being up to date with the latest payment processing technology, but it is also a matter of meeting customers’ demands and fulfilling their expectations.

That is why the total transaction value of digital payments in 2023 is projected to reach a whopping $9.46 trillion. With more and more integrated payment platform solutions coming to the forefront, this figure is likely to grow at an exponential pace.

If you have just started your business or want to set up virtual terminals for credit card processing for an older entity, the process may seem a bit daunting. But even if it sounds stressful, it isn’t impossible to understand.

If you use the right kind of merchant services, you can begin to collect payments online in no time. Here’s how you can collect online payments and run your online store.

Step 1: Find an Integrated Payment Solution

To start taking payments online without any hassles, your best bet is to turn towards an integrated payment platform as your payment service provider. This will give you the ability to process and automatically sync major credit cards (e.g. Mastercard, Visa, Discover, American Express), debit cards, automatic clearing house bank transfers of ACH payments, and e-check transactions.

Thankfully, specialized entities provide these integrated payment platform solutions and make the process simple.

Built with scalability in mind, these virtual terminals for payment card processing can help you with accepting credit card payments online in no time using an easy-to-use payment gateway. But they do not stop there. Depending on the kind of payment technology you select, you can also accept an array of other digital payments.

These include but are not limited to digital wallets (like PayPal, Venmo, Apple Pay, Google Pay, etc.), recurring billing, email invoicing, text2Pay, and bank account payments.

If you select an integrated payment method, you can also set up your point of sale (POS) terminal at your brick-and-mortar store with it. This way, you can see all your revenues and incoming credit card transactions in one place.

With Stax, you can offer a variety of payment options to your customers including credit and debit card payments, mobile payments, ACH transfers, eChecks, and contactless payments. You can even create customizable, professional invoices for your customers or send them a checkout link via text or email to get paid faster.

Step 2: Making Payment Provider Comparisons

You may have seen it firsthand.

It’s common (and widely expected) for your customers to shop around for details at other payment service providers before going with what you have to offer.

Similarly, you need to make proper comparisons between integrated payment platform services before selecting one for your online business.

Here, you will need to keep some key factors in mind. These aspects include but are not limited to:

  • Functionality. Check what kind of features and integrations the solution offers. Does it help you keep your customers’ information safe by ensuring PCI compliance? Does it allow you to integrate your most commonly used business apps with its APIs?
  • Ease of use. Evaluate how easy it is going to be for your employees to learn and use the solution.
  • Variability. Check if the payment service provider is only offering virtual terminals for payment card processing or if you can accept multiple payment methods.
  • Cost. Compare processing fees and costs between other payment service providers to make sure you are paying competitive prices. While there’s no way to accept online payments for free (because of the non-negotiable interchange fees set by card networks), look for a merchant account provider that doesn’t charge a host of additional fees or markups. Typically, they would pass on the costs of interchange and their markup in the form of monthly fees or transaction fees. As such, providers like Stax which offer membership-based pricing with no hidden fees or markups, are the most cost-effective for growing businesses.
  • Customer support. Evaluate the level of customer support offered by each provider to ensure that you receive prompt assistance when needed. Look for providers that offer 24/7 customer support through multiple channels such as phone, email, or live chat. Read reviews and testimonials from existing customers to get an idea of their satisfaction with the provider’s support services.

Step 3: Setting Up Your Payment Solution

Now that you have made your decision about which online payment service provider to go with, it’s time to set it all up.

Some integrated payment platform providers make the onboarding process as smooth as possible. Make sure that you choose a solution that not only provides you with an easy setup but also goes on to offer long-term ease of use.

As a general rule, always keep in touch with the payment service provider while setting up payment gateways or virtual terminals for payment card processing. This allows you to ask questions and get relevant answers during and after the setup phase to avoid any potential issues.

The Bottom Line

At Stax, we make it quick and easy for businesses to accept credit cards in-person, online, and on the go. Through our best-in-class, integrated solutions, Stax gives your business the ability to accept payments anytime, anywhere across Apple or Android applications.

Our smart all-in-one platform is perfect for businesses that need online payment services or take payments over the phone. With simple invoicing, recurring charges, and online bill pay, you’ll get paid faster with Stax.

If you are currently in the process of finding an online payment processing software, reach out to Stax today. Our Payment Consultants will be glad to answer any questions you may have and help you find a solution that’s a perfect fit for you.

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FAQs about Accepting Online Payments

Q: What are some ways businesses can accept payments online?

Businesses can accept online payments through various methods such as credit and debit cards, mobile payment processing, eChecks, email invoicing, recurring billing, SMS text payment requests, contactless payment options, virtual terminals, peer-to-peer (P2P) payments, eCommerce shopping carts, and payment gateway plug-ins.

Q: Why are online payments important for businesses?

Online payments are crucial for modern businesses as they facilitate transactions without the constraints of time and distance. They also provide faster payment processing, thereby improving cash flow. In an increasingly digital world, not accepting online payment methods may limit a business’s customer base and revenue prospects.

Q: Can businesses accept payments via mobile devices?

Yes, with the advancing technology, businesses can now accept payments via mobile devices. This method is convenient, fast, and secure, allowing customers to pay from anywhere, anytime.

Q: What are eChecks and how do they work?

eChecks are a form of online payment where money is withdrawn electronically from the payer’s checking account and deposited into the payee’s account via an electronic funds transfer (EFT). eChecks are popular for processing recurring payments and typically clear within 3 to 5 business days.

Q: What is Email invoicing?

Email invoicing is the digital exchange of invoice documents between a business and a customer. It enables businesses to send out payment requests to their customers online. Customers can then open the invoice via email, enter their desired payment information, and make instant payments.

Q: How does SMS Text Payment Requests work?

SMS payments allow businesses to request payments via a text message sent from a mobile phone. With a high open rate, SMS payment requests offer a quick turnaround time for receiving payments and allow customers to use digital payment options directly from their smartphones.

Q: What are contactless payment options?

Contactless payment methods allow customers to make payments without physically touching payment hardware. These methods include touch-to-pay credit and debit cards, Apple Pay, Android Pay, Google Pay, and Fitbit Pay. They can be used via a smartphone, smartwatch, or other contact-free devices.

Q: How can Peer-to-peer (P2P) Payments benefit businesses?

Peer-to-peer (P2P) payments allow the transfer of funds between individuals or entities without the need for traditional financial intermediaries. They offer a convenient and efficient way to send and receive funds, eliminating the need for physical cash or checks.

Q: What is an eCommerce shopping cart in the context of online payments?

An eCommerce shopping cart is a software application that allows customers to select and store items for purchase while browsing an online store. Upon checkout, customers can pay for these items using their desired online payment method.

Q: What is a Payment Gateway Plug-In?

A payment gateway plug-in authorizes credit cards or direct payment processing for e-businesses and online retailers. This plug-in allows businesses to seamlessly process payments directly from their e-commerce store.

Q: How can businesses set up an online payment solution?

Businesses need to select an integrated payment platform that can process major credit cards, debit cards, ACH payments, and e-check transactions. Comparison of different providers, considering functionality, ease of use, payment methods supported, cost, and customer support is crucial in making an informed decision. After selecting the provider, businesses can set up the solution with the help of customer support from the provider.