I once had to lovingly push one of my business coach clients to accept credit cards as a freelancer. At this point in his business, he was still accepting checks or cash as a form of payment.
Their reasoning? They didn’t want to deal with fees. The way the saw it, if they chose to accept credit cards that meant they would have to lose money in processing fees. Meanwhile, if they only accepted cash or check, they would keep the entire payment.
This makes sense – on the surface. The reality is you could actually be losing money by choosing not to accept credit cards as a freelancer. Not to mention it makes accounting extra messy.
Here are three reasons you should always accept credit cards as a freelancer.
There are ways to deal with fees.
Sure, it’s a bummer when you see a percentage of a payment going toward processing fees. No one is denying this fact. However, there are ways to deal with fees so that they aren’t so costly.
For example, Due.com integrates with PayPal and Stripe in order to accept credit cards. Both of these companies have minimal feels in comparison to using a point of service system or a credit card processor. Both a POS or credit card processor have different fees that can vary depending on credit card company, what bank issued it, whether the card was debit or credit, etc. In actuality, it can get messy. Meanwhile, PayPal and Stripe fees are pretty straightforward.
Additionally, you can deduct processing fees from your taxes. Granted you won’t get all of the money back, but you will get a percentage.
It’s better to have a fee than to lose an entire payment.
Here’s the reality of the world we live in: credit cards and PayPal are just easier for people. In fact, I recently read a blog post by a popular finance blogger who suggested we change the name of checkbooks to “What Are Those?” precisely because no one uses them anymore.
It makes more sense to take a hit in the form of a processing fee than it does to lose an entire payment because your client never gets around to writing a check. Additionally, people would rather use cards to get points and rewards anyway.
The bottom line is as a business owner you need to make it easy for people to pay you, and not accepting credit cards is a perfect example of making things more difficult for everyone.
Cash Leads to Messy Accounting
At this point, it’s no secret that business owners have a more complicated tax situation than W-2 employees. Why on earth would you make it even more difficult to stay organized for the tax man by accepting cash while forgoing accepting credit cards?
If you think accepting cash will keep you from paying taxes you may want to rethink that. These guys know every trick in the book and will notice if something is off with your accounting.
Additionally, it’s in your best interest to keep your accounting as streamlined as possible. Not only does it make things easier come tax time, it also ensures that you can better manage a business and personal budget simultaneously.
Final Thoughts
Refusing to accept credit cards because you’re afraid of losing money to processing fees is an unrealistic fear that leads to more problems in the long run. Fees can be dealt with. Additionally, you don’t want to end up losing money over lack of convenience or messing up your accounting. Neither scenario is a good one for any freelancer.
