QuickBooks Online Accountant: Everything a Pro Needs to Know

Quickbooks Accountant

QuickBooks Online Accountant is an essential tool for professionals to use. The platform makes it easy to manage all aspects of your practice from just one login. Learn more about the platform and how it can help improve your day-to-day tasks as an accountant below.

What is QuickBooks Accountant?

While QuickBooks Online and Desktop versions are for business owners, QuickBooks Accountant is designed for professionals who support multiple accounting clients. It even supports practices that have clients who are not on QuickBooks.

Benefits of QuickBooks Accountant

There are many benefits of choosing QuickBooks Accountant for your practice, which lead to an overall improvement in efficiency. Some benefits of the platform include:

Easily Manage Your Workflow

Having one log in makes it easy to track every project from start to finish. This helps ensure that nothing falls through the cracks.

Share Documents Securely

QuickBooks Accountant allows you to communicate with clients and manage deadlines all within the platform.

Manage All of Your Clients

It’s easy to add all of your clients to QuickBooks Accountant, where you can include information, notes, and details about the client all on one consolidated list.

Add Apps to Customize Your Experience

There are hundreds of third-party solutions to help customize your QuickBooks Online Accountant experience. Apps can fill out forms, simplify payroll, track time, manage customer relationships, and more. There is even an option to save 25% with the Accountant Apps Program.

Practice Management Features on QuickBooks Accountant

Many of the new features of QuickBooks Accountant dramatically enhance practice management capabilities. You can create projects and tasks for a to-do list, delegate tasks to your employees, check progress in real time, and see clients’ QuickBooks notifications. Intuit will also suggest actions for you to complete for your clients, like payroll deadlines and reconciliation.

This platform keeps you constantly connected to your clients. You can send and receive messages without leaving your workflow. All shared documents can be easily accessed, and they are kept organized in a password-protected environment. In addition, it can be accessed anywhere, as practice management is compatible with your phone and desktop devices.

For more information about project management on QuickBooks Accountant, visit their FAQ section.

QuickBooks ProAdvisor Program

The ProAdvisor Program is designed to help practice owners succeed. This training program helps grow your expertise while helping you earn CPE credits. While it is always free for accountants, you will need to pass the certification exam to earn unlimited phone support (in the United States) and to receive a listing on the ‘Find-A-ProAdvisor’ online directory. This listing is key to showcasing your skills, which will help you attract more of the clients you want to work with.

By taking advantage of the ProAdvisor Program, you can stay up to date on the latest software, receive discounts for you and your clients, find out about exclusive third party apps, and more. The program ensures QuickBooks Accountant is doing all that it can to help your practice flourish.

ProConnect Tax Online

ProConnect Tax Online is one of the top cloud-based pro tax softwares available on the market. With advanced tools like automatic updates, efficient data collection, and an Intuit e-signature option, this platform provides ease to many different aspects of your workflow.

Integrating ProConnect Tax Online inside of QuickBooks Online Accountant allows you to streamline your tax preparation. By importing client data directly into tax forms, this integration saves you time and helps you avoid critical errors. ProConnect Tax Online gives you access to over 5,600 forms and tax returns, which easily covers all tax essentials your practice may need. In addition, with everything securely backed up in the cloud, you have access to your files from anywhere.

Now that you’ve learned all that you need to know about being a pro with QuickBooks Accountant, get started with a free sign up today.

New Features in QuickBooks Online

QuickBooks New Features

Updates to QuickBooks Online- Summer 2018

Intuit is always hard at work in hopes to improve their products and help business owners maximize their efficiency. The latest updates to QuickBooks Online is a mixture of new features on the platform, as well as many performance improvements to ensure QuickBooks Online runs as quickly and as smoothly as possible. While many of the recent changes have the self-employed in mind, overall performance updates are helpful to all businesses. Keep reading to learn what’s new to the platform!

New Features in QuickBooks Online

Failed E-Invoice Notification when Email Fails to Send

As a business owner, you rely on receiving payments from your customers. But you can’t blame them if they never receive the invoice! That’s where QuickBooks newest notification comes in handy. With this latest feature, if your e-invoice fails to send due to an error, QuickBooks will immediately send you an email informing you of what happened and how to successfully resend the message.

If for whatever reason you miss the email in your inbox, don’t worry! Intuit will inform you of the failed e-invoice in a few other ways. They include: an updated status within the invoices list, an explanation within the invoice tracker, support steps under the ‘Needs Attention’ filter on the invoice list, an in-line explanation within the email modal, and step-by-step community help articles.

Redesigned Invoicing in QuickBooks Self-Employed

Your invoices should reflect your personal style, not Intuit’s. The invoicing experience has been completely revamped on QuickBooks Self-Employed, and gives users the option to leave a personalized impression while continuing to improve efficiency and organization. Some new updates to the invoicing feature include: customizing the subject line and main message of the email, duplicate prior invoices that you want to create again, send receipts for paid invoices to allow customers transparency, and the option to send a mobile reminder to customers before payments are due.

Two New Reporting Options

The two most-requested new reports are now available! You can now create reports for bill and invoice payments. This is an easy way to show vendors and customers which bills and invoices correspond to which payment. It will also be a quick way to settle any disputes.

The days of cobbling together vague payment trails using the transaction list are over. To find these new features, visit the ‘Reports’ tab and run reports that clearly associate payments with the bills and invoices they cover.

Customize Payment Accounts on QuickBooks Capital Loans

Through QuickBooks Capital, you will be able to group principal and interest payments into separate accounts. This is important because it allows users to write off the interest at tax time, which help keeps the principal from being taxed as income.

To do this on future loans, the first step will be to login to QuickBooks Online (after you have accepted the loan agreement from QuickBooks Capital), and navigate towards the ‘Capital’ tab on the left-hand side. From there, you will choose the bank account that received the initial loan deposit, a loan payable account to track the loan principal, and an interest expense account to track the interest. These accounts can be changed at any time. As you make payments, you’ll be able to track the activity by category, which keeps you organized.

Bulk Receipt Exporting to Save Time

This new bulk receipt exporting feature helps you save valuable time during tax season. Instead of exporting receipts individually to file them in your records, you can now run a report that will download all of your digitized receipts at once. This provides business owners maximized organization while using minimum effort.

Automatic Sales Tax

Sales tax can be confusing. Let QuickBooks do the work for you! Because they keep track of more than 60,000 tax laws, the platform can save you time and automatically calculate your tax rate. To turn on automatic sales tax, click the ‘Taxes’ option on the dashboard. Then, select ‘view return’ on your monthly return, followed by ‘make the switch.’ It’s that simple!

QuickBooks Assistant in the QuickBooks Self-Employed App

There are many obstacles for those who are self-employed, and oftentimes they can leave self-employed individuals overwhelmed and feeling like there is no one to work these challenges out with. Introducing the QuickBooks Assistant: Intuit’s virtual aide found within the Self-Employed app. This aide gives you on demand help and insights to solve your questions about the platform.

To find this tool, first open the app, and then select the green message icon. This starts your conversation with the bot, where you can interact through text and/or voice commands. While the bot is extremely powerful and can help answer many of your questions about your finances, if you require a more in-depth answer, you have the option to connect to live support from a human.

ClockShark Integration

ClockShark is a mobile time tracking and scheduling solution. This mobile app is free for employees to download, and allows them to clock in and out from any job site. It was designed with construction and field service companies in mind but can work for other industries as well.

With this new QuickBooks Online feature, companies that use ClockShark can now seamlessly transfer their time records into their accounting software. This allows easier payroll and invoicing, and also helps avoid data entry errors. QuickBooks and ClockShark automatically syncs employees, jobs, and tasks every hour, but if you need something to sync immediately, all you have to do is hit the ‘export to QuickBooks’ button.

Performance Updates in QuickBooks Online

Faster Invoice Actions

Looking to delete, void, or copy invoices and/or sales receipts? You are now able to do so! Find these options in the ‘Action’ column of your all sales list.

Quick Link to Your Transaction Audit Trail

There is now an option within the all sales filter to easily find deleted or voided transactions.

Improved Paychecks that are Deposited in Two Accounts

QuickBooks Online now shows paychecks that are deposited in two bank accounts as two distinct transactions. This makes it easier to match when it is time to reconcile.

No Payroll Permission for Users

When adding users to your QuickBooks Online account, you now have the option to assign a no-payroll permission. This helps protect your financial security without limiting the user’s access in any other way.

For further information about QuickBooks product and feature updates, as well as solutions to common QuickBooks error codes, be sure to check out our blog!

QuickBooks Connect 2018 – Agenda, Location, and More

Quickbooks Connect 2018

Quickbooks Connect 2018

What is QuickBooks Connect?

Held by Intuit, QuickBooks Connect is designed to give small business owners, entrepreneurs, and the self-employed the opportunity to learn, grow, and network with professionals from around the country. At this conference, business owners will discover the latest trends in innovation and how they can impact their businesses. Between vendor booths, product demos, free design consultations, and more, this event will provide you valuable knowledge on how to maximize your business’ success.

When and Where is QuickBooks Connect 2018?

This year, QuickBooks Connect will be held November 5-7 at the San Jose Convention Center in San Jose, California. Intuit has set up hotel accommodations at multiple hotels throughout the area, including the Hilton San Jose, San Jose Marriot, and Hyatt Place. All of these hotels are .1 miles or less away from the Convention Center.

QuickBooks Connect 2018 Agenda

There are 3 days at this conference, with each day full of learning and networking opportunities. The agenda for each day is as follows (subject to possible changes):

Day 1 of QuickBooks Connect: Accountant Day (November 5th)

  • 8:30-10:00 am: Registration and Breakfast
  • 9:00-10:30am: Accountant Welcome and Keynote
  • 11:00am-12:00pm: First Round of Breakout Sessions
    • Winning Strategies for Working with the Gig Economy: In this session, you’ll learn to identify the unique needs and opportunities when working with self-employed individuals. You will also be introduced to tools that will help keep you and your self-employed clients in sync.
    • Ninja Warrior Strategy For Accountants – How to Rule Your Niche: This session will teach you real-life strategies to position yourself as an expert and acquire premium clients while getting paid what you’re worth.
    • The Good, the Bad, and the Ugly – Assessing and Onboarding New Clients: Learn the best practices for new client assessments and onboarding to keep both your clients and your team happy.
    • Using Technology to Set Your Firm Apart: Wondering how you can stand out against your accounting competitors to help attract more clients? This session focuses on leveraging technology to create innovative solutions that your competition can’t match.
    • Accounting for eCommerce – Data Flow and Management with QBO and Apps: This session will teach you how to use QBO and apps effectively, how moving data and using an import tool can increase efficiency, tips for simplifying Charts of Accounts setup, and more.
    • Tax Session: Description not yet available.
    • Large accounting firm session – Content Designed for the Specialized Needs of Large Regional, National, and Global Accounting Firms: Description not yet available.
  • 12:00-12:45 pm: QuickBooks Connect Tour
  • 12:00-1:30 pm: Lunch
  • 12:00-7:30 pm: Exhibits, Activations, and Connections
  • 1:30-3:10 pm: Second Round of Breakout Sessions
    • Selecting the Right App – Step by Step: This hands on workshop will teach you how to identify exactly what you need in an app, how to analyze your search results, and how to effectively compare similar apps to determine which one to use.
    • Creating Effective Marketing Videos: From equipment, software, platforms, and content strategy, this session will teach you the basics of creating an engaging and informative video to market your services.
    • Transitioning Existing Clients to Value Pricing: Working too hard for not enough money? In this session, you’ll learn powerful reframing strategies to help raise your prices without losing your existing clients.
    • Influencing from the Inside Out: In today’s hyper-competitive world, it’s difficult to not overextend yourself in hopes to stand out. In this session, you will learn the inside-out approach to increasing your influence and help you create a strategy on how you show up in the professional world through writing, speaking, and personal style.
    • Intentional Onboarding – The Key to Strong Client Relationships: Having a set onboarding process is key to forming happy, long-term client relationships. This session will teach you how to create a systematic onboarding process, as well as how to establish clear expectations for your team and your client.
    • Tax Session: Description not yet available.
    • Large accounting firm session – Content Designed for the Specialized Needs of Large Regional, National, and Global Accounting Firms: Description not yet available.
  • 3:10-3:30 pm: Break
  • 3:30-4:30 pm: Third Round of Breakout Sessions
    • Accounting for eCommerce – Data Flow Management with QBO and Apps: See day one, first round of breakout sessions.
    • Blockchain 101 for Accountants: This session will teach you all you need to know about blockchain technology, including how it works, it’s impact on accounting, its strengths and weaknesses, and the impact it can have on your daily work.
    • Diversifying Revenue Streams for Success: Learn about four distinct income types you can generate as an accountant, plus how to establish the right mix to see success.
    • Culture is Everything – Building a Modern Firm: You may not realize it, but your firm’s culture exists at every level of business. From beliefs and behaviors to technology and security, this session learn how to assess the culture of your firm and ways to improve to attract ideal clients and retain top staff.
    • Sharpen Your Consulting Skills: This live demonstration will show you how consulting works with a client, teaching you about valuable tools to help make you successful.
    • Tax Session: Description not yet available.
    • Large accounting firm session – Content Designed for the Specialized Needs of Large Regional, National, and Global Accounting Firms: Description not yet available.
  • 4:30-4:50 pm: Break
  • 4:50-5:00 pm: Fourth Round of Breakout Sessions
    • Accounting for Cryptocurrencies: Learn the basics of crytocurrency accounting, financial accountability around blockchain-based assets, and identify the technology and policies that can help your accounting challenges.
    • Collaborative Coaching for Firm Owners: In this interactive session, you will learn how to overcome distractions to increase focus and grow your firm.
    • Large Accounting Firm Session – Content Designed for the Specialized Needs of Large Regional, National, and Global Accounting Firms: Description not yet available.
  • 5:45-7:30 pm: Welcome Reception
  • 6:00-7:30 pm: Apps Showdown

Day 2 of QuickBooks Connect: Main Day (November 6th)

  • 7:30-8:30 am: Registration and Breakfast
  • 7:30-8:30 am: Exhibits, Activations, and Connections
  • 7:45-8:45 am: First Round of Breakout Sessions
    • How to Become an Inspiring (and Profitable) Practice: Learn a step-by-step system on how to become inspirational, and how that can lead to success, happiness, and profitability for your firm.
  • 9:00-10:30 am: Welcome and Keynote
  • 10:30-11:00 am: Break
  • 10:30 am-3:50 pm: Exhibits, Activations, and Connections
  • 11:00 am-12:00 pm: Second Round of Breakout Sessions
    • Financial Freedom for Freelancers: Oftentimes, those who are self-employed have difficulty managing business finances. This workshop will help you create a solid foundation for future business success.
    • Managing vs. Leading – Inspiring and Growing Your Team: Having difficulty being the boss? This session will help you find your leadership style and help you navigate areas of strength and improvement for you, your staff, and your business.
    • My Job, My Rules – Freelancers on Making Their Big Leap: This session features four fearless women who left their careers to step out on their own.
    • Online Branding to Amp Up Likes and Shares: Social media is constantly changing. This session will teach you the latest tips and tricks to create a relevant online brand.
    • How to Get What You Want, When You Need It: Best for those who are starting and growing a business, this workshop teaches you what you need and how to ask for it.
    • Who Runs the World? Motherhood and Business: There is a rapid growth of female entrepreneurs who are eager to redefine success and workplace norms. Enjoy a conversation with four working mothers and how they achieve a work/life balance.
    • The Ninja Warrior Strategy for Accountants – How to Rule Your Niche: See day one, first round of breakout sessions.
  • 12:00-1:30 pm: Lunch
  • 1:30-2:30 pm: Third Round of Breakout Sessions
    • Legal Know-How for the Entrepreneur: From the right structure for your business to how to tips for contracting, intellectual property, and working with influencers, this workshop is great for new business owners.
    • Mastering the Hustle – Working More than One Gig: This session features four creative minds all in varying stages of their career. Learn how they balance full-time jobs with new businesses working for themselves.
    • Be the CEO of Your SEO – Maximizing Online Search: Learn the ins and outs of online search and how to position yourself above the competition online.
    • No Stone Unturned – New Funding Sources to Fuel Business Growth: Looking for funding tips? This session connects you to experts who are uncovering and funding new companies everyday.
    • Financial Freedom for Freelancers: See day two, second round of breakout sessions.
    • Prime Time – Mastering the Art (and Science) of Retail: Retail is experiencing a renaissance, and with it comes new data insights and distribution channels that are opening up new ways to reach consumers. This workshop features four retail leaders who are blazing a new path.
    • How to Get What You Want, When You Need It: See day two, second round of breakout sessions.
    • QuickBooks Technical Session: Description not yet available.
    • Stepping Up Your Leadership Presence: Learn how to align and elevate your digital and face-to-face presence to help create a powerful and authentic brand.
    • Panel Discussion – Bookkeeping Buds and Their Secrets of Success: From navigating social media, staff management, setting boundaries, and transitioning to a mobile practice, learn lessons these bookkeepers experiences in the field.
  • 2:30-2:50 pm: Break
  • 2:50-3:50 pm: Fourth Round of Breakout Sessions
    • Online Branding to Amp Up Likes and Shares: See day two, second round of breakout sessions.
    • Small is the New Big: Hear tips from four entrepreneurs who have been through the paces and growing a business of one.
    • Managing vs. Leading – Inspiring and Growing Your Team: See day two, second round of breakout sessions.
    • No Stone Unturned – New Funding Sources to Fuel Business Growth: See day two, third round of breakout sessions.
    • Be the CEO of Your SEO – Maximizing Online Search: See day two, third round of breakout sessions.
    • My Job, My Rules – Freelancers on Making Their Big Leap: See day two, second round of breakout sessions.
    • Beyond the Numbers – Correcting and Overcoming Non-Financial Mistakes: Oftentimes, financial struggles are caused by non-financial missteps. This session will teach you how to look beyond the numbers to the root causes of financial mistakes and how you can correct them.
    • Collaborative Coaching for Firm Owners: See day one, round four of breakout sessions.
    • QuickBooks Online for Construction Clients: Learn how to setup a financial structure, create a project budget, basic job costing, how to use estimates, progress invoicing, and other construction-specific workflows.
    • QuickBooks Online for Non-Profits – Tracking Restricted Net Assets: This session is suggested for those who know the fundamentals of how to use QuickBooks Online for the non-profit sector. It will be discussing how to use additional features to get a Statement of Position and Statement of Activities that accurately reflect new net asset standards.
  • 4:00-5:30 pm: Main Stage
  • 5:30-6:30 pm: Exhibits, Activations, and Connections
  • 5:30-6:30 pm: Reception
  • 7:00-10:00 pm: Celebration

Day 3 of QuickBooks Connect: Accountant Finale (November 7th)

  • 7:30 am-12:30 pm: Exhibits, Activations, and Connections
  • 7:30-8:30 am: First Round of Breakout Sessions (TBD)
  • 7:30-9:00 am: Registration and Breakfast
  • 9:00-10:00 am: Second Round of Breakout Sessions
    • The Business Growth Accountant – Building Stronger Relationships so Clients Value and Pay You More: In this session, you will learn proven insights on how to build stronger client relationships.
    • Selecting the Right App, Step by Step: See day one, second round of breakout sessions.
    • Tech Stacks for Construction Client Success: This session will explore technology options that are designed to make managing construction-specific tasks easy.
    • Tax Sessions: Description not yet available.
  • 10:00-10:20 am: Break
  • 10:20-11:20 am: Third Round of Breakout Sessions
    • Winning Strategies for Working with the Gig Economy: See day one, first round of breakout sessions.
    • Tax Session: Description not yet available.
  • 11:20 am-12:30 pm: Lunch
  • 12:30-1:30 pm: Accountant Main Stage

Why Should You Attend QuickBooks Connect 2018?

QuickBooks Connect isn’t just a way for you to better understand how to use QuickBooks to maximize your business’ efficiency and success. With a wide variety of breakout sessions and things to do, you can learn valuable business building skills from industry experts.

No matter what stage you are in your career, there are opportunities for you to grow and improve your business. New businesses can benefit from breakout sessions like How To Get What You Want, When You Need It and Legal Know-How for the Entrepreneur, while more established business owners can benefit from sessions like Transitioning Existing Clients to Value Pricing. In addition, there are endless networking opportunities, where you can build valuable relationships and learn important lessons from your peers.

For more information about pricing, be sure to visit the QuickBooks Connect website.

How To Get the Lowest Credit Card Processing Fees

Credit card processing fees don’t seem like a large expense at first. But the more transactions your business completes and the more consumers look to use cards over cash, the fees quickly begin to add up. In addition, merchant accounts can be costly if you choose the wrong provider.

Navigating the credit card processing industry can be extremely confusing, especially for new and small business owners. With dozens of payment processors to choose from, and with each company offering different rates, fees, and contract terms, it can be difficult to know what provider is the best fit for your business.

The bad news is that credit card processing fees are unavoidable. But the good news is that there are plenty of ways you can save money on them! Use our tips below to score the lowest credit card processing fees for your small business.

Credit Card Processing Fee Tips for Small Businesses

1. Look for a Payment Processing Company that has No Hidden Fees

You can’t save money on payment processing if you don’t know what fees you are paying. While every company has its own fee structure, choosing one with no hidden fees will allow you to expect them, which helps prevent from you being caught off guard. In addition, you can know exactly what you are paying for.

It pays to shop around to find the best deal, especially when it could be a difference of a percentage point or more of your credit sales. But be sure to do your research – saving a point on credit sales can be great for your bottom line, but you want to make sure it’s the best fit for your business model. You need to pick a company who offers the features that your business needs, which may include EMV compliance, customized reporting, and support.

2. Purchase a Credit Card Terminal Rather Than Leasing One

Many credit card processing companies will give you the option to rent the equipment as well. While it sounds convenient, think of it like renting anything else: you’re putting money into something you don’t own. Because of that, you’ll end up spending more money in the long run.

3. Set a Credit Card Minimum for Your Customers

Ever walk into a small business and see a credit card minimum sign? That’s a tactic they use to help keep their credit card processing fees down. Since you are often charged per transaction, setting a $5 or $10 minimum can help reduce the amount of fees your small business will pay.

When faced with a set minimum, your customers will either turn to cash or choose to spend more money to meet the minimum, both of which are great for your business. Cash helps you avoid fees altogether, and the extra revenue can help offset credit card processing fees.

To implement this change, all you need to do is prominently display a sign to your customers and ensure your employees follow through with it.

4. Swipe All Credit Cards

Transactions that are manually entered by the merchant have higher fees than cards that are either swiped or inserted. This is because cards that are entered manually are at a higher risk of fraud, as thieves often obtain credit card numbers without a physical credit card to make purchases. The higher the risk of fraud, the more credit card processors charge you in fees.

The chip technology and magnetic stripe contain built-in security features that help reduce the risk of credit card fraud. If an employee suspects fraud, he or she can ask to see a photo ID to ensure the name on the ID matches the name on the card.

5. Negotiate With Your Credit Card Processor

If you’re looking to negotiate with your credit card processing company, you need to prove your business is a merchant that adds value. To do this, you want to show your transaction volume. The more transactions you perform, the more value it adds to the processor. The more you give them, the more negotiating power they have upstream to lower their overhead in different areas.

6. Settle Transactions Quickly

Settling your transactions helps reduce interchange downgrades. To qualify for the lowest interchange rates for many US cards, the capture, or clearing call, must happen within one day of the authorization. For certain industries, like travel and entertainment businesses, the capture can happen within 8 days.

7. Understand the Three Main Fee Structures

There are three main fee structures charged by payment processors. The best option for you depends on the size and type of your business. They are:

Flat Fee Pricing Structure

This is the easiest model to understand. The merchant pays the processor a flat fee for all credit and debit card transactions. While it is easy to understand, this pricing structure often comes with high flat fees.

Interchange Plus Pricing Structure

This pricing model charges a flat fee percentage that combines the interchange rate and assessment fee, plus a dollar amount per transaction that the processor pockets. Compared to tiered pricing, the interchange plus pricing structure is more transparent and less expensive to the merchant.

Tiered Pricing Structure

A tiered pricing model takes into account the interchange rates for various transactions and categorizes them as a qualified rate, mid-qualified rate, or non-qualified rate. Because it is based on transactions, tiered pricing is difficult for merchants to predict and prepare for. This allows the merchant to estimate and manage monthly processing fees at a significant higher processing cost.

The better you understand credit card processing options, alternatives, and the fees associated with it, the more money you can save. Following our tips above can help you achieve low credit card processing fees and save your business money.

Credit Card Processing Guide for Small Businesses

Small Business Credit Card Processing Information

Credit card processing is a complex process that can be overwhelming for many small business owners. But, it is crucial for merchants to understand the basics of credit card processing, as it will help them save money by avoiding unnecessary fees. Below is our complete guide to knowing the main parties involved in credit card processing, what equipment is needed, and the types of processing fees a small business may encounter.

The Basics of Credit Card Processing

There are 5 Major Players Involved in Credit Card Processing

In order for your small business to make credit card processing a reality, five key players will need to work together. They are:

1. Credit Card Associations

These are your major credit card companies, like Visa, MasterCard, American Express, and Discover. Visa and MasterCard are the overseers behind credit card processing. They coordinate the process of using one of their cards by managing rates, setting regulations, and routing transactions. American Express and Discover do not play by the same rules as Visa and MasterCard, and have a unique way of allowing businesses to accept customers’ credit cards.

2. Issuing Banks

These are the institutions that actually issue the credit cards mentioned above (ex: Chase and Bank of America). Issuing banks are the ones responsible for holding the funds or providing the credit that the consumer will draw on to complete a transaction.

3. Acquiring Banks

These are the institutions that provide and maintain merchant accounts for small businesses. Acquiring banks take on the risk of providing refunds or chargebacks if the business is unable to pay back the consumer.

4. Merchant Service Providers

Merchant service providers are the ones that handle the sales and push the transactions through the networks provided by the different credit card associations. There are different types of organizations that fulfill this role, including:

  • Agents
  • Acquiring Banks
  • Third Party Service Providers
  • Processors
  • Independent Sales Organizations

5. Payment Getaways

Payment getaways are special portals that route transactions to an acquirer (ex: an online shopping cart).

Four Ways to Accept Credit Cards

In order for your small business to accept credit cards, you will need to choose one of the options below. Which you choose will depend a lot on your unique situation, as each method has its own benefits and drawbacks. Your options include:

1. Point-of-Sale (POS) Systems

A POS system is more than just a credit card processing method, as it offers functions such as tracking inventory and accessing sales reports. A high quality POS system will integrate with your existing software and bookkeeping tools. Small businesses that have a higher sales volume typically use POS systems. There are two basic types, which are:

  • Traditional POS System: A traditional POS will require some type of merchant account, and will integrate a terminal and a screen with a cash register and receipt printer. There are additional optional features like pin input devices to process debit cards.
  • Mobile POS System: A mobile POS requires a third party device (ex: iPad) that allows you to run a program to accept credit cards. This type of POS system is extremely convenient, as the POS system can be physically moved and you have access to your data no matter where you are. In addition, some mobile POS options don’t require a merchant account.

2. Credit Card Terminals

For small businesses that do not process a large quantity of transactions a day, a credit card terminal may be a better option. A credit card terminal is a small device with a card reader that allows you to accept credit cards. It does not have the extra features that a POS provides, but it gives your business the ability to accept card payments.

The main benefit of credit card terminals is that it is typically the simplest and cheapest option. All you need to do is choose a processing company, open a merchant account, and plug in a few cords. A major drawback of using a credit card terminal is that you must manually track transactions. This can add a considerable workload if you process a large quantity of transactions every day.

3. Mobile Credit Card Processors

A mobile processor is an app combined with a dongle, which allows you to accept credit cards no matter where you are. This option is best for small businesses that work with customers on the go, like a food cart or street vendor. This type of processor can also be beneficial for retailers that want to swipe cards away from a physical register.

One reason that small businesses choose mobile processors is that you do not need a set location to accept payments. This allows you to accept payments where you actually do business, so you do not have to follow up with customers at a later date to collect payment. In addition, many mobile processors offer additional features, like the ability to generate reports. For more mobile processors, no merchant account is required.

One downfall of using a mobile processor is that small business owners have to pay extra for the convenience of mobility. This type of processor typically comes with higher fees than a simpler terminal. In addition, you will have to supply your own device that is compatible with the app you are considering.

4. Online Credit Card Processors

An online credit card processor is a third party company that processes your credit card transactions without the need for a merchant account. As the name would suggest, this type of processor is great for small businesses that primarily do business online. In addition, businesses lacking sufficient credit history or those with a low credit score can benefit from using an online processor.

One of the main benefits to choosing an online credit card processor is that no merchant approval is needed, which is why it’s a great option for businesses with little to no credit or a poor credit history. The downfalls of choosing an online processor is that there are high transaction fees and a higher risk of disputed charges.

There are 3 Types of Credit Card Processing Fees

No matter what method you choose to accept credit cards, all of them come with fees that your small business will have to pay. There are three main types of fees your small business will experience. They are:

1. Transactional Fees

Transactional fees are charged per business transaction. They are non-negotiable and represent the biggest cost of operating a merchant account. This fee is set by an agreement made by representatives from the major banks and those from the individual card brands. Interchange fees are determined on a “per-transaction” basis, and are dependent on the card type, card category, processing method, and business type.

2. Flat Fees

Monthly flat fees are dependent upon the type of business you run. They vary by name, value, and applicability. While you may not encounter all of them, some of the more common flat fees include:

  • Terminal Fee
  • Payment Getaway Fee
  • Annual Fee
  • Early Termination Fee
  • Monthly Minimum Fee
  • Network Fee

3. Incidental Fees

As the name suggests, incidental fees are charged when something happens. Not all incidental fees can be avoided, but small business owners want to aim to have as few of these charges as possible. Some examples include:

  • Address Verification Service (AVS) Fee
  • Retrieval Request Fee
  • Batch Fee
  • Non-Sufficient Funds (NSF) Fee

For more information on specific fees your small business may be encountering, read our blog on credit card processing fees.