Retail customers expect to be able to pay with credit cards, and few retail stores would try to insist on cash from all their customers nowadays. Doctors, lawyers, and other service professionals are often still behind the times, though.
Why do professional offices resist accepting credit cards? Some are concerned that taking credit cards may look unprofessional. Over 2.5 trillion credit card transactions are accepted every year, so it’s probably time to get over that idea. In fact, accepting credit cards allows you to avoid collections and even those conversations about collections. Having to agree to a credit check before seeing a doctor doesn’t exactly provoke warm and fuzzy feelings, does it?
Other professionals are just uncomfortable with the technology and don’t feel they have time to do the research and learning they figure they’ll have to do in order to take credit cards. A good merchant services provider makes the whole process easy, so this is an unnecessary fear.
The thing that should motivate you to get over those fears is the fact that you’ll be paid faster when you accept credit cards. Psychiatrists, counselors, private trainers, and other professionals who accept credit cards can expect to be paid as much as 30 days faster than those who don’t. That means that you’re usually working on jobs that have already been paid for, not on cases that may or may not be paid at some time in the future.
Your customers will probably also spend more. This depends on the kind of service you offer, of course. A CPA may not have any little extra impulse purchases available for clients, but a hairdresser or designer sure does. A dentist can suggest options that may be better for the patient but costlier, and a consultant can offer special long term rates for clients who set up recurring credit card payments. These are just examples, but studies have shown that people spend about 30% more in restaurants and stores when they pay with credit cards, so there’s a strong likelihood that the same will be true in your office.
Some professional offices worry about the fees for processing credit cards. It’s true that there are fees. However, you have to compare them with the cost of preparing and sending invoices. Your office staff have to keep track of invoices and payments, prepare and print invoices, put them into envelopes, stamp them, send them, keep track of outstanding invoices, collect the payments in the form of checks, prepare bank deposits, and take the deposits to the bank. The staff costs and prices for processing and storing the papers add up, according to studies, to several dollars for each invoice. The cumulative costs of invoicing can easily match the fees for credit card processing.
That’s before you even think about the cost of having less in your bank account, the time required to make calls reminding clients about their outstanding debts, or the larger costs of resorting to collections or charging off bad debts.
The credit card companies are in the business of determining who’s credit worthy and of financing debt, so you don’t have to be.
Cash flow is improved when you accept credit cards, and that’s important. You may have a calling, but you also have a business, and cash flow is very important for your business
