Updated: October 7, 2024
Ask ACE
Ask ACE: Advice for outsourcing POS, payment processing and payroll solutions
By Crystal Cole, Ledgewater Consulting LLC
Q: I am overwhelmed by all of the rules I need to follow for point-of-sale transactions, payment processing and payroll. I obviously need to outsource, but I’m just as overwhelmed by the options. Any advice?
ACE advises: Business owners often make choices because of others they know and make decisions on the fly. The problem is this: POS, payment processing and payroll solutions simply are not one-size-fits-all, and every business is different.
Some general recommendations
1. Read first: Too often, people sign off on contracts without reading them. Thirty minutes could save you headaches and fees down the road.
2. Explore options and ask questions: Next to family, health and home, your business is your most important investment. Do not let salespeople make decisions for you. Take responsibility for your own due diligence. Ask other business owners for recommendations and ask questions about their experiences.
When you speak with payment processors, ask about all charges (setup, refunds, disputes), types of payments supported, payment turnaround, security and compliance, integration with your online platform, customer support, analytics, chargebacks and disputes.
3. Credit card fees: A 15-cent transactional fee is high; 30 cents is excessive. Know your discount rate (the percentage fee). Chances are, if you’re not paying close attention to fees, they may have increased. If you think you’re paying too much, you probably are. Tip: Your overall effective rate for merchant processing = total fees/total volume. If it is more than 2.7%, it is likely too high.
4. Shop locally: When it comes to a payroll service provider, bigger does not mean better. Small, local companies can often offer the hands-on support people need, plus they do not charge for every little request. They have a vested interest in building and maintaining good customer relationships.
Crystal Cole, founder of Ledgewater Consulting LLC, is a business strategist offering competitively priced payment processing and POS systems through select ISOs. She does a great deal of education and loves helping hard-working Mainers save money. She can be reached at crystal@ledgewaterconsulting.com or 207-415-4461.
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