Everyone wants to get paid faster. Last month at Xero Hour San Jose we discussed ways to get paid faster. It was a lot of fun!
In case you weren’t able to make it to Xero Hour in June, we will summarize a few of the points we discussed. We talked about different payment solutions that integrate well with Xero and that can make getting paid easier. We brought up some points that you might want to think about before you make your decision on which payment solution to go with.
You can add various payment services to your Xero file. Xero does not process the payments but allows you to integrate an add-on that will connect Xero to a merchant service account.
How Payment Services Work with Xero
There are two different ways that the add-ons can work with Xero. The first way is that the invoice is created in Xero and when you email the invoice there is a link that brings up the invoice with a “Pay now” button that allows your customer to pay you. Most solutions will enter the customer payment in Xero.
The second way is that the invoice gets created in the add-on. The add-on pushes an invoice into Xero and the payment happens outside of Xero. With most of these, you have the option for the payment to automatically be entered in Xero. This type tends to work better for recurring charges such as a subscription-based service, like recurring monthly fees for memberships or when integrated with a system outside of Xero that generates your sales.
It might not seem like a big difference but you will want to understand how the solution you are reviewing works. Do you want the invoice to be generated from the add-on or from Xero? It is important to understand how the solution you are looking at works and to consider your workflow when choosing which payment service will be best for you.
Just because something “integrates” with Xero does not mean that it necessarily will work well for your particular needs. It’s important to find the best fit for you.
ACH Vs Credit Cards
You will hear the terms ACH and credit card payments mentioned a lot when it comes to payment services. ACH stands for Automated Clearing House. When something goes through ACH the payment comes from your customer’s bank account. When your client pays by credit card, the payment comes from your customer’s credit card account.
For your customer, the difference might not be very big, but for you, as the business owner, it could make a big difference because the fees for ACH are generally much less than for credit card payments. Usually, ACH fees are a flat per transaction charge and credit card fees tend to be a percentage of the amount of the sale. If you are doing large transactions this can make a BIG difference in the fees you are charged.
Some of the solutions we have used or our clients have used include PayPal (quite easy to set-up to receive payments right away), Stripe, Bill.com, Bill & Pay, Practice Ignition and IntegraPay.
Even if you were not able to come to June’s Xero Hour, try to come this month. The topic for July is “Get into the (work) flow” – we will talk about best practices, tips, processes and more all geared to help you to create an efficient and productive workflow for your bookkeeping or accounting firm. We are doing a lunch event this month for Xero Hour- San Jose on July 26th at Maggiano’s at Santana Row at (noon) 12:00 pm. You can RSVP for Xero Hour here. We hope to see you there!