Pick a regular time each week to handle bookkeeping responsibilities so they do not pile up.
By Cara Aley
April 22, 2013
Bookkeeping is one of what many would consider the necessary evils of running a successful business. But it doesn’t need to come with the stresses that so many of us associate with financial management. We’re here to provide some pointers for making the process a bit easier, and hopefully eliminate some of the pain from the process!
Consistency is key. The worst time to handle bookkeeping, and the time when many of us do it, is when things pile up so high that we finally feel we have to. Or, we are driven by some deadline that comes upon us and handle the work at the last minute. Tax time, anyone?
By setting aside a few hours on a particular day or two every week to handle your bookkeeping responsibilities consistently, you will feel less of the stress of the pile-up and will get into a healthy habit both for you personally and for your business.
Make sure your payables are up to date. The stress of having vendors call you to remind you that you still owe them is one that can be avoided by keeping your bills paid and up to date. With much of the accounting software available today, you can schedule reminders to pay your bills. Alternately, if you are setting aside time each week to handle this responsibility, then you won’t risk falling behind.
Make sure your receivables are up to date. There is nothing like running your AR report to find that many of your customers are overdue on their payments. This means a bigger effort to reach out to folks to remind them that payments are due than if you did it consistently. You can also purchase software that automatically emails customers when their bill has slipped past its due date.
Hire someone a professional to do your bookkeeping work more efficiently, resulting in less stress for you!
Hire someone to assist you with the more administrative work. Hiring someone to help you with your bookkeeping could be an incredibly worthwhile investment. Consider that you could otherwise be doing business development and making more money for the company than toiling over your financial management practices, and also consider that someone with experience in bookkeeping might be far more efficient than you.
Bookkeeping does not have to be the great stressor that so many business owners feel it is. Consider handling bookkeeping on a more regular basis so that the work doesn’t pile up so much. Additionally, ensuring that your bills are paid to others and that your customers are paying you are two great ways to reduce the stresses associated with both! Finally, there is the option of actually hiring someone with experience to handle the work for you. They might be able to do it faster and better than you, and free you up to do both what you love and are best at.
So don’t let bookkeeping get the best of you. While it is a critical part of your business, and keeping up to date on it is extremely important, there are numerous ways to make the experience less painful!
Have tips for lowering stress levels associated with bookkeeping? We want to hear them!
Guest author Cara Aley is a freelance writer who covers a wide variety of topics from bookkeeping tips to online reputation management.
By Debbie Allen
March 18, 2013
Businesses of all sizes can use payroll software programs to handle the processing and calculations of its payroll. In addition to computing payrolls, these software programs can also be used to keep accurate records. In other words, payroll software programs streamline the payroll process. Even in large companies, the programs make the task of handling payroll very manageable.
Although outsourcing payroll requirements is a viable option, keeping the process in-house offers the advantage of standardized flexibility. The company can easily make changes according to its specific needs. This can be especially helpful for such things as keeping up with employee reimbursements for travel and similar expenses.
Even if a company chooses to use professional payroll services, it is still a good idea to have an in-house payroll software program. An automated system can ensure that the appropriate information will always be gathered and sent to the payroll service in a timely manner. This provides peace of mind for all concerned.
In this way, everyone can rest assured that checks will be received on schedule. This will happen even if a key player is out due to sickness or on a vacation. The payroll software program can do the work it is programmed to do.
Payroll Software means less work for the person responsible for payroll tasks.
There are several payroll software programs available to choose from. Some can be used to print checks or even to make direct deposit payments. Other programs can interact with human resource files. This means less work for the person responsible for payroll tasks. The program can gather essential information from the human resource files.
Not only does this save time and work, it also eliminates some human errors. In addition, some payroll programs can handle tax forms. This helps ensure employees receive their W-2s as required.
Before buying payroll software programs, it is wise to do a little research. One of the first considerations is deciding exactly what it is that is needed from the program. For instance, a large construction company will have different needs than a hair salon. Regardless of the type or size of business the program is being purchased for, scalability is also important.
The program should offer room for growth and flexibility. Every company needs the ability to customize their payroll software program.
In addition, the payroll should be compatible with other accounting software programs in use. Plus, it should interact with human resources files. This is especially important in larger companies. Payment options such as direct deposit are also important. This option eliminates paperwork – which saves time and money.
Online payroll software programs are an excellent choice. These programs are always current and well-maintained.
The bottom line is, payroll software programs are cost-effective tools that save time and provide peace of mind. As long as the program purchased meets the needs of the company and works with other software programs already in use, a payroll software program is a great investment.
Debbie Allen is a freelance writer that likes sharing tips about topics like how to choose a quality payroll service provider. Images courtesy of Stuart Miles, David Castillo Dominici and xedos4 at FreeDigitalPhotos.net
By the ZippyCart eCom team
March 13, 2013
Though credit cards are great, they should not be your only online payment options an e-commerce store offers. According to Fred Neff (President, Internet Merchants Association), online payment options can make a huge impact on the number of your online sales. Therefore, it’s vital for e-commerce business owners to break out of the ‘traditional credit card payment’ mold and provide buyers with more options of online payment.
Customers are always looking for more when it comes to making payments… global shoppers, especially. Even today, there are many countries and situations where customers don’t feel comfortable with the use of credit cards online. South Africa is a good example of such an emerging markets. Online shoppers in this region are especially hesitant to reveal their credit card information while buying or purchasing products online. They expect to have more payment options so that they can complete their purchase.
The more payment options you offer on your e-commerce website, the more likely your customers, especially global shoppers, will be to complete the purchasing process.
Regardless of where you are in the world, you’ll find potential buyers who are reluctant to put their credit card information into just any online store. And with good reason… you cannot trust that every eMerchant has built their online store with eCommerce solutions software that provides PCI-compliance.
It’s no wonder a market of alternative payment options has emerged around the world. In the USA, PayPal, Payment by Amazon and a few other powerhouses are the standard. People from different countries, however, prefer using different options of online payment. Many countries would have their own most preferred options. Going back to the growing African market, for example, most of the online buyers prefer making their payments through their mobile devices using a service called M-Pesa. There are many different favorites around the globe, however. You’ll need to put a little research into your possible markets to make sure all your bases are covered.
The number of online buyers is continuously on the rise and experts are projecting eCommerce and mCommerce to become the new norm. By offering a wide variety of online payment options, you are actually helping customers in their buying process. If you check out, you’ll find a number of payment service providers or payment processors, which you can choose according to your website requirements. You can also hire professional services so that your chosen payment systems can be easily integrated with your shopping cart software. If you have an old website, you may need some upgrade before you are ready to embrace modern payment processing tools.
Since e-commerce has a wide presence today, you’ll always find a number of payment processors to use.
Some of the most preferred options include –
- PayPal’s Bill Me Later
- Amazon Checkout
- Google Checkout
- Secure Trading
Of course, there are many more. Depending on the technical capabilities of your shopping cart software, you can choose those tools that suit you best. In any case, you should always remember to provide your customers with several payment options so they can easily convert and complete the purchase. All you need to do is focus on providing your e-commerce website visitors (or customers) with a seamless transaction experience.
Online retail sales are projected to increase by leaps and bounds. When the customer base is ready to buy, your business should also be geared up really well towards providing payment systems that customers want to use. In doing so, you can rest assure you are doing the best to increase your online store’s sales.
By Stitch Labs
Febuary 18, 2013
As a small owner business owner, it can be difficult to sift out what metrics you should be focusing on in your business and what you should leave to your accountant. Most eCommerce options do an excellent job keeping track of metrics, including conversion, cart abandonment, and overall profit, to help you gauge the health of your business. However, every online merchant should pay attention to these three key metrics even when software is doing a lot of the heavy lifting.
- Cost of Goods Sold (COGS)
Primarily an accounting term, COGS describes the total value of your products sold during a specified time period.
This is the value to you, the seller, and not the sale price.
There are multiple approaches to calculating COGS, but the number includes the costs in bringing the inventory to your shelf and getting it into sellable condition. So, this can include materials, shipping from vendors, equipment, overhead, etc.
While calculating COGS is necessary for taxes, it is also required to figure out our next metric: Inventory Turn.
Inventory Turnover is the number of times your inventory is sold in a given time period. It is an important metric in understanding the rhythm of your business, but it should be noted that it shouldn’t be relied on as a sole measure of success.
Consider it a must-know metric for all business owners and a starting point for digging in deeper to your data. Changes in gross margin and surprises in sales can affect turn and there are more detailed ways to evaluate turn to account for these additional factors. Potential investors will want to know about inventory turnover and you should be fluent in the concept if you’re looking toward investment.
To calculate inventory turn, divide your cost of goods sold by inventory. Here, inventory is determined by the average cost of inventory on hand.
The equation for calculating inventory turn is:
Inventory Turnover = Cost of Goods Sold/Inventory
For example, if your COGS for the year was $100,000 and your average inventory on hand during the year was $10,000, your Inventory Turn would be 10. This would represent selling your total inventory 10 times over during the year. Real numbers will vary by retailer and industry.
You’ll see Inventory Turnover referred to quite a few ways. It can also be called inventory turns, stock turnover, stock turns, or several other similar variations.
Many retailers pay attention to conversion rate from visit to purchase, but often neglect repeat customer rate. This metric is more clear from its name and is the rate at which customers make additional purchases.
Repeat customers are important to understanding your business as they establish patterns and reveal more about your audience and their wants. These repeat sales can also reveal which products or product families are your strength. Additionally, it is often less expensive to sell to loyal customer than to depend on new customer acquisition.
Calculate repeat customer rate by dividing your total customers by the number of customers who’ve made two or more purchases. This can be calculated for the life of your business or a specified time frame.
As an example of how this number is useful, let’s say you produce adult sportswear, but you notice that your repeat buyers are women. As you drill down in your reports, you see that it’s not just women’s sportswear that shows repeat sales, but the items sized XS. From here, you have some interesting choices to make. Do you try to reproduce the same fan base in other product lines? Or, do you hone your focus and become a petite women’s sportswear company instead?
Your repeat customer rate informs you about more than just successful products. Other factors could come into play. You may find that you have a higher repeat rate with a specific sales channel or maybe a lower repeat rate in a time zone where you have less customer service coverage.
Comparing repeat rates against every piece of data you have about your customers provides a wide array of actionable insight.
Cost of Goods Sold and Inventory Turnover reveal what you’re spending to put products on your shelves and the rate at which you’re making sales and refilling those shelves. Your Repeat Customer Rate reveals where you’re succeeding, and possibly failing, with customers.
Going beyond traditional metrics and mastering these is a must for online sellers and they will serve as a springboard for more sophisticated analysis as you grow.
Guest post contributed by Brandon Levey of Stitch Labs, provider of an online application for simple inventory management, order fulfillment, invoicing, expense reporting and business analytics.
By Mike Ward
December 10, 2012
Merchant Account Due Diligence
The decision to choose a merchant account provider should not be treated as a flippant one. Truthfully, an ill-chosen merchant provider has the power to do considerable damage to a small business. Fortunately, if one conducts proper due diligence, then finding the right merchant account provider is simply a matter of taking the correct steps. In this article, we will discuss several points that ought to be considered in the process.
This is where due diligence ought to begin. Ensure you are dealing with a company that has been in business for at least three to five years. New merchant account providers can be okay, but let someone else find out if they are legit or not!
- Customer Service
Quality Once you conduct all of your research and choose a provider, the bulk of your relationship will be centered upon customer service. Is the merchant provider available by phone 24 hours per day? What hours exactly? By email? Skype? Make sure that it is easy to get in touch with the provider. Make several calls throughout different times of day to test the customer service quality.
A merchant account makes money every time your business executes a financial transaction. These fees range between 1%-2%. They should not make money in any of the following ways: application fee, setup fee, installation fee, programming fee, annual fee, etc. If the merchant provider is trying to rake in fees in these areas, run in the other direction.
- International Payments
Many businesses will set up a merchant account and never realize that international payments cost much more than domestic charges. This is fine as long as the business does not have a heavy segment of international clients. If it deals in a global market, however, make sure that international fees are agreeable.
- Reserve Fee
Be sure you understand exactly how the merchant provider structures reserve fees. A reserve fee is the fee a processor will keep back in order to cover chargebacks and other issues if one’s business is considered high risk.
- Monthly Cap
The last thing you want to happen is to have your best month ever in sales and realize that there is a cap on monthly transactions. This can lead to massive losses in potential sales. This information will be clearly spelled out in your merchant account agreement. Make sure that you understand the exact cap if there is any.
- Customer Reviews
Finish these steps off by going over reviews and customer feedback to ensure sure you are dealing with a company that is highly rated with thousands of positive feedback pieces. Be sure to read into the reviews; most legit reviewers will list both good and bad qualities of the company they’re reviewing.
Merchant account providers can vary greatly in quality and safety. The industry is littered with companies that engage in shady tactics designed to take advantage of uninformed small business owners. By following these steps, a business owner will weed out many of those operations.
Guest author Mike Ward graduated from the University of Pittsburgh, and while attending college he became a freelance writer. In 2009 he started writing for merchantseek.com, where we compare rates and processing solutions from different merchant account providers.
A new approach to billing can help build and monetize business relationships!
By Scott Swartz
November 19, 2012
Every company wants to be in the know and stay on top of the latest trends. Every company also wants to deliver the best product and experience to its customers. The latest buzzword to sweep the business world is “social” and focusing on the social aspects of business allows companies to deliver on both of the above initiatives.
From social media to the social enterprise, social seems to be infiltrating every corner of the business world. It all comes down to understanding and interacting with your customers. Now this is not necessarily a new idea; companies have wanted to better understand and interact with their customers forever, but now businesses can leverage social tools to learn more about their customers. For example, businesses can use social media to track behavior and build relationships with their customers. However, social CRM does not end with social media. Organizations can drive social CRM through business relationships. That’s when the social meets the financial and transactional elements of the customer.
The difficulty that companies face now is that prior to the rise of social customer relationship management (CRM), CRM applications were used primarily to track sales opportunities. Now CRM applications need to monetize relationships. They need to be able to handle evolving relationships between companies and their customers and partners. In order to do this, CRM applications need access to the billing system to provide further information about their customers and the things they buy. If the CRM application has access to billing, selected services and other details, companies can better know their clients and form more meaningful relationships with their customer base. This allows organizations to drive social CRM through monetization.
When CRM applications integrate with billing systems, they can model the full details of established agreements, amend pricing, drive customized quotes and enroll customers to more fully monetize the relationships. Billing systems contain information from enrollment to payment. In other words, they cover the entire relationship from beginning to end. In particular, quote-to-cash solutions encompass the process of creating a quote for a customer, turning on services, sending invoices, capturing the payment and everything in between. CRM gives companies a basic way to handle relationships, but businesses who recognize how those relationships can be more fully monetized will win in the future.
When unique financial details are pulled from the billing system, they allow relationships to be driven deeper and better reflect the uniqueness of the customer. CRM applications can pull these details from billing systems and use this information to upsell customers based on their financial history. This can be any type of relationship, like the subscription one offered by Zipcar or a pay-as-you-go relationship like the one offered by MetroPCS Communications. Regardless of the type of relationship, financial details provide deeper context to make sense of and advance the relationship. For example, a customer’s financial history can be immensely helpful to a sales representative, as he is able to access that information when he goes to sell to that specific customer. He can see the customer’s history with the company and decipher the best offers and promotions for him, increasing the chance of securing the sale. Finally, by integrating the CRM application with a billing system, the sales representative can access this information directly from the CRM user interface (UI) to which he is accustomed.
The future of the business world is focused on social business. Social media is everywhere, and while it’s imperative for most businesses to get on Twitter and Facebook, social business for the enterprise is far bigger. Businesses need to embrace social CRM and make use of the product, package, subscription, usage and payment information sitting in their billing systems. Don’t let the opportunity pass by. Creating and managing relationships with your customers is vital, so make the transition to monetary relationships. The CRM responsibility ends with the basic sales aspects of the relationship, but the quote-to-cash process creates an end-to-end business workflow that helps make those sales more profitable.
Guest author Scott Swartz is the founder and CEO of MetraTech, a company that specializes in relationship monetization. Scott brings more than 20 years of software and services industry leadership to MetraTech. Scott founded MetraTech in 1998, after spending time at NetCentric, an early entrant in the business of cloud computing and where he created the industry’s first SGML/XML billing protocol. Prior to NetCentric, Scott was a Director at Cambridge Technology Partners, a pioneer in the delivery of client/server solutions for large enterprises. At CTP, he led the deployment of complex customer care, billing and logistics solutions for Fortune 100 and 500 companies. He has been named a Technology Pioneer by the World Economic Forum and is a Director of the Massachusetts Network Communications Council. Scott holds a bachelor’s degree in electrical, computer and systems engineering from Harvard University.
Online payments are so convenient!
By Heather Legg
November 5, 2012
Whether a business is an online one or a physical store or business, a big benefit it can have is accepting online payments. Not all businesses start out this way, and it can be a big mistake. All businesses should really employ online payment services. Here are some reasons why:
1. It’s Easier!
Most people are foregoing the checkbook these days and opting for debit or credit card payments. Whether a store is an online business or even a physical one, online payments make it easier. It’s also very easy for a business to set it up whether they do it themselves or hire an eCommerce company to do it.
An online store needs to accept online payments or else they’ll be waiting for checks to come in and being held up their transaction. But a physical store can also benefit from the ease of online transactions. Think about businesses that have monthly payments coming in, whether it’s a pest control business, utility company, or a dance school. It will be much easier for them if they just set up online payment services for their customers. Other businesses that have monthly bills can do the same.
2. It’s Reliable
Everyone is familiar with the term, “The check’s in the mail,” but it seems too often they the check never actually shows up. With online payments, there’s no more waiting around for a check to come in. There is also a clear record of payments. This works in both the business owner’s and the customer’s favor. No more lost payments from either end.
This works for the customer and the business!
3. Better Recordkeeping and Cost-Cutting
If there is a payment issue, it is a lot easier to resolve with online payments. Not only is it easier for the business owner to keep track of payments, but the customer can also check to make sure payments have gone through. Happier customers make for better business!
It also allows the business to cut costs by omitting sending out paper bills through the mail and physically entering payments into a system, which is a costly, time-consuming part of business. With online payments, this is all cut out, freeing up more time and money for other aspects of the company.
4. Choices and Options Are Still Available
Some businesses heading in this direction are providing options for online payments. Some are doing automatic billing, such as membership places like gyms or businesses that offer lessons or services that are a consistent price each month or annually. Some offer the option of non-automatic payments so the customer still has the control over the payment, but it can be done online all the same. This makes it convenient, again, for the business owner as well as the customer.
5. Provides Payment Options Around the Clock
With online payment options, worries of late payments can be forgotten. Payments, even non-automatic ones, can be made at midnight or any time other of day. Usually these online payments clear much faster than waiting on a check and physically depositing it. Not only can the payments be made at any time, but that also means that the money is in the business owner’s pocket faster.
With so many aspects of business going online, the financial end should be one of them. Most businesses already advertise online and have some sort of online presence, even if they are a primarily physical business. It’s easy enough to add online payments to this, and things will only get easier and more profitable.
Guest author Heather Legg is a blogger who writes about Internet safety, online shopping, and the many advantages of businesses that accept credit cards.
By Jim Dicso, president and chief revenue officer, SundaySky
July 9th, 2012
Relationship marketing strategies have permeated across all industry sectors. It is commonly accepted that fostering a better customer experience drives customer loyalty, which in turn increases a customer’s willingness to consider additional purchases and recommend the company to friends, as well as to build barriers against switching vendors. Satisfied customers help drive growth and, for customer retention-focused online businesses, satisfaction is critical.
Successful customer relationship strategies start with the first contact an organization has with a customer, but the first 90 days are the most critical. During this time period, the brand has the opportunity to turn a new customer into a brand advocate and upsell him value-added products and services. Delivering a poor experience not only results in missing out on these benefits, it is also likely to drive churn in the relationship.
In order to turn a customer into a loyal brand advocate, the online business needs to give him a reason. One of the leading indicators of a customer’s perception of a company is the quality of the organization’s customer support efforts. For example, when a company engages a consumer with a personalized email confirmation stating, “Hi, John. We are pleased to inform you that your size 12 blue running shoes shipped and will arrive tomorrow,” the consumer feels a sense of brand loyalty. Customers today demand a personalized, engaging experience throughout their lifecycle with the brand. However, many brands fail to provide that experience at one of the most recurring, complex touch points with a customer, the monthly bill.
Traditionally, the billing and payment process is difficult to understand. Customers often receive surprising or unexpected items on their bills without an explanation. This phenomena is usually referred to as bill shock. There are three reasons for this:
- Customers are inundated with information and a commitment made three to four weeks ago can easily be forgotten.
- Customers fail to read their statements in detail – most look for the amount due and when that number that doesn’t seem right, they respond (usually in a negative way).
- The expansion of services, products, accessories, taxes and other fees result in, well, a confusing statement.
And let’s face it – scrolling through multiple pages of usage details, transactions and various charges (whether online or in hard copy) is not the most engaging experience. If a customer has questions about the bill, there is limited ability to address those questions. Yet, bill delivery is the primary recurring touch point that a company has with its customer.
Industry leaders are now turning the less-than-enjoyable bill, statement and invoice experience into a positive communication touch point with the use of online video. Video is a more engaging format to present a customer’s statement than the traditional multi-page statement. The video can explain account and usage information to the customer in an easily digestible manner that is personalized in both the visual and narration elements. Personalized video bills set customer expectations upfront so there are no surprises, educates the customer so he knows exactly what he is paying for and why, and more importantly, delivers a “wow” experience that allows the customer to feel valued.
Consumers are more likely to look at a two-minute video rather than scroll through pages of data; and more importantly, the video can proactively address issues and frequently asked questions. Viewers are also more receptive to promotions within a video bill, so new features and value-added services can be offered, such as paperless billing and autopay. The delivery of video bills result in:
- A boost in customer satisfaction;
- Reduction in customer care costs, as video bills deflect bill-related calls from the company’s contact center and decrease time spent on such calls;
- Increased stickiness through uptake in value-added services;
- Increased retention rates because the bill-related engagement is no longer negative.
Delivering “wow” experiences communicate the importance of a consumer’s relationship with a company. It means treating the customer as an individual and being intensely relevant at that moment in time. Consumers respond favorably to such experiences, particularly when they balance information, entertainment, empowerment and satisfaction, as video bills do. The result: consumers spending more, repeating purchases and referring their friends.
Guest author Jim Dicso drives the go-to-market strategy, sales execution, business development and revenue growth at SundaySky. In doing this, he helps support the growing market demand for the company’s solution among industry leaders. He received a bachelor’s degree in electrical engineering from Villanova University and prior to joining SundaySky, Jim was executive vice president of sales and services at LivePerson, a SaaS-based provider of real-time online customer engagement solutions. During his tenure, he built the enterprise sales organization from scratch and LivePerson business solutions revenue grew from $17 million to $96 million and operating earnings grew from $2 million to $30 million.
By Meghan Faye Wolff
June 25, 2012
As an e-commerce business owner, chargebacks can be deadly to your merchant account. A chargeback is similar to a refund. The difference is that instead of calling your business, the cardholder contacts their credit card issuing bank for their money back. When this happens, you not only lose out the sale, but you have to pay a chargeback fee for having to process the reverse transaction.
It’s also important to know the rules set by the credit card companies. Visa allows no more than 100 chargebacks per month and a chargeback ratio less than 2%. MasterCard allows no more than 50 chargebacks per month and a chargeback ratio less than 1%. Anything above these limits and your acquiring bank may terminate your merchant account.
If you’re a new business owner or you don’t know much about how to prevent chargebacks, then you’re in luck. Here are four killer ways to prevent chargebacks before they kill your merchant account.
1. Provide a Clear, Detailed Billing Descriptor
A billing descriptor is just as it sounds—a description of your business that appears on each billing statement. With a good billing descriptor, should give your customers no reason to contact their issuing bank. If you clearly state your company name and provide a customer service number, then cardholders will recognize your business and know how to reach you.
2. Use Email Receipts to Confirm Orders
Not everyone has access to a printer and not everyone cares to print confirmation pages. By sending email receipts, your customer will have their order saved to their inbox as a reference. If you need to fight a chargeback, you can use the email receipt as proof that your customer approved the transaction by not disputing the order at the time of the purchase.
3. Screen All Transactions
When processing credit cards online, you have the ability to screen transactions through your payment gateway. Look for orders that seem suspicious and may be fraudulent. If a fraudulent order appears on the real cardholder’s billing statement, they’re most likely going to contact their issuing bank and demand their money back—initiating a chargeback. If you can spot fraudulent orders before you ship the goods, you can prevent chargebacks and save the cardholder a lot of time and money.
4. Require Shipping Signatures
Some customers may try to scam you by claiming they never received their purchase. By using a shipping service that requires a signature upon receipt, you will definitely prevent a great deal of chargebacks. Shipping signatures provide proof that you sent your goods as promised and someone accepted the package.
If your efforts to prevent chargebacks fail, don’t worry. You can still fight them. Your acquiring bank will contact you when a customer initiates the chargeback, and you’ll have three days to fight it. All credit card companies require you to provide different supporting documents, but any document with a signature will definitely work in your favor. Requiring a photocopy of the credit card, a photo ID, or even a signature with the purchase will come in handy when fighting chargebacks.
Guest author Meghan Faye Wolff is the senior copywriter and marketing specialist for Instabill Corporation. Instabill provides international and offshore payment processing solutions to e-commerce and MOTO merchants worldwide. Meghan writes about social media marketing, word of mouth marking tips, tips for start-up businesses, and e-commerce and payments industry news on the Instabill blog.
December 29, 2011
There are two kinds of posts that are inevitable this time of year. One is the never-ending barrage of holiday posts, telling you everything and anything you would ever want to hear about buying and selling. The other, of course, is the end-of-the-year-get-ready-for-tax-season post. We hate to tell you, but you’re reading the latter!
Wait, though, before we click away for another year-end best music list. This tax season blog post at least has a focus, and that’s to tell you all about the PayPal 1099-K.
Is It a Fancy New Car?
Unfortunately, no. The tax form PayPal 1099 is a new form that PayPal uses to report earnings to their users. If you have an online store, for instance, and you collect your earnings via PayPal, you may receive the 1099 tax form in the mail in early 2012.
Before, you would simply perform the task of figuring out your taxes owed with no interference from PayPal. They were simply a way you would bring in the money from your customers. Now however, due to new legislation, the IRS requires PayPal to report earnings. Since their earnings come from users like you, they now will send out the new 2012 1099k for online sellers.
That is, if you’re qualified. You see, not everyone gets the new form, as it’s for a very specific subset of sellers. There are two requirements you must meet to get the new 2012 1099s for online sellers.
- Must make over $20,000 of sales online in 2011
- Must have made that $20K in 200 or more sales
If you hit those two requirements, then you’re going to receive the form in the mail come January or so. If not, then it’s business as usual.
What Do I Do?
Well, it turns out, not much. The only real difference is PayPal is now telling you how much you made in 2011 instead of you having to figure it out on your own.
But PayPal isn’t infallible. They may get it wrong or make a mistake, which is why it is vital that you keep good records of each and every sale and expense in your business. Why we say it’s a good idea this year, however, is you don’t want to end up paying more than you should. Since this is PayPal’s first year sending the new 2012 1099 instructions out, there may be a hitch or two. You just want to be prepared.
Tracking expenses is doubly important as the 1099 doesn’t track that at all. You are still required to keep accurate records of everything you pay out to keep your business afloat. If you don’t accurately report it all, you’ll either pay more in or risk being audited – neither of which is any fun!
This guest post was brought to you by Outright.com. For more about the PayPal 1099-K and other tax time advice, visit the Outright Tax Center!
October 27, 2011
By the ZippyCart Content Team
Social ecommerce solution provider Sociable Labs has raised $7 million in a Series B funding round led by Battery Ventures. The announcement came Wednesday after the company emerged out of stealth. Existing investor Javelin Venture Partners also contributed to this round of funding.
Sociable Labs, a 25-person start-up based in San Francisco, also received seed funding from Facebook’s 2009 fbFund. The unique ecommerce solution provider helps clients draw in customers by focusing on the brand’s ecommerce website and encouraging users to share purchases within their social networks.
Sociable Labs offers customers a unique approach to social commerce by focusing on sharing within a brand’s ecommerce solution rather than building fan pages and accumulating “likes.”
The company has an array of tools merchants can integrate into their online retail stores. Sociable Labs sees the social commerce value in real communication and interaction with consumers while they are on a retailer’s website. Sociable RSVP and Purchase Share, the company’s most popular features, are integrated directly into a retailer’s website, which allows customers to share their purchasing via Facebook. The technology employed combines features of Facebook’s social graph with ecommerce functions of a merchant’s site.The focus is on delivering “hard” ROI to retailers. “Hard” ROI refers to traffic, sales and conversions. Sociable Labs asserts its technology works exponentially better than simply adding a “like” or “share” button.
Sociable Labs Founder and Chief Executive Officer Nisan Gabbay evaluates the success of their ROI-platform:
“Traffic converts 300 percent better into sales than traffic from Facebook fan pages, and also better than traditional forms of online marketing. It’s a win-win for marketers and consumers.”
Sociable Labs provides an innovative platform that enables consumer social sharing straight from retailer websites. They understand that word-of-mouth marketing is the most powerful tool in today’s market. Their applications allow consumers to share purchases with friends or identify friends they want advice from before completing a purchase. Their platform is already used by several top retail brands such as Rue La La, HauteLook, Chegg.com, and Active.com.
The most social shopping experience online is currently the “like” button on Facebook. However, the “like” button is not a useful shopping tool to consumers until they are preparing to make a purchase. If the social shopping experience is moved to retailers’ ecommerce websites, people will find the social sharing of friends’ buying activities much more beneficial.
For example, if you log onto Rue La La (and have authorized Facebook Connect for the site) and are looking at a certain brand, it will show you which of your Facebook friends are fans of that brand.
Sociable Labs currently charges merchants $50,000 a year to use their social commerce platform. The company plans to use the new funding to market their software more extensively now that it has moved out of beta.
October 19, 2011
By the ZippyCart Content Team
Dropbox announced Tuesday that it has secured $250 million in a Series B round of funding led by Index Ventures.
Dropbox is a company that uses cloud storage technology to provide a place where users can store and share files on the Internet. The service boasts 50 million users and is valued at an estimated $4 billion. Its main competitors in the cloud storage business include Box.net, which recently secured a $162 million round of funding, and Apple’s iCloud storage service that was unveiled last June.
The San Francisco-based company could have become part of iCloud; Steve Jobs offered to buy Dropbox from founders Drew Houston and Arash Ferdowsi back in December 2009. They turned down a nine figure offer to continue to grow the company into something bigger on their own.
Dropbox offers users 2 gigabytes of storage for free; after they have used that up customers can add 50 gigabytes to their shopping cart for $10 a month or 100 gigs for $20 a month. In comparison, iCloud offers 5 gigabytes of free storage up front, 15 gigs for $20 per year, 25 gigs for $40 per year, or 55 gigs for $100 per year. There are more than 220 million users of iOS devices to whom Apple will be heavily marketing its iCloud storage service.
The new financing for Dropbox will allow the company to grow from 70 employees to 200 during the next year. Back in 2008 Dropbox had just 9 employees and 200,000 users. The company’s revenue is projected to reach $240 million by the end of 2011. Houston had this to say:
“Our goal has always been to build a service that hundreds of millions of people would love and trust. We’re inspired by the consumers and businesses who depend on Dropbox, and we will continue to make sure that the world’s devices, services, and apps work together seamlessly.”
The idea behind Dropbox is that in today’s world full of smartphones, tablets, and laptops, people rarely have all their files stored in one place. Houston realized the need for a service that allowed people to upload their files to a “cloud” that could be accessed from any of these devices. Users can also invite others to share their files, making it convenient for people in different locations to collaborate on anything from music or artistic projects to business documents.
Houston said in an interview that he gets emails all the time from people claiming that Dropbox has saved their files in some life-changing way, and added that the best part of getting the company to where it is today is simply being in a Starbucks and seeing someone sitting there using Dropbox. The company is growing rapidly and users are adding storage space to their shopping carts on a constant basis. Houston recently made a deal with HTC, the makers of Android phones, that will make Dropbox the default cloud storage option for those devices.
October 18, 2011
By the ZippyCart Content Team
Ecommerce platform Shopify announced Monday that it has accumulated $15 million in Series B financing. The primary investors include Bessemer Venture Partners, FirstMark Capital, Felicis Ventures, and Georgian Partner.
The Ottawa, Canada start-up is a popular platform for businesses who are looking for an ecommerce solution but lack the means to buy expensive coding software. Shopify provides merchants the tools and support to create and maintain an online storefront. The platform assists everyone from individual entrepreneurs to large organizations and even recording artists. Currently, it powers stores for over 15,000 merchants including Angry Birds, LMFAO, General Electric, CrossFit, and Tesla Motors.
Shopify was launched 5 years ago by Tobias Lutke as a method of selling snowboards online after Lutke noticed the difficulty of creating a professional online store. It quickly became a useful tool for other businesses and entrepreneurs due to its ease of use, attractive templates, and scalability. Shopify aims to help businesses of any size effectively create and maintain cheap and easy-to-operate ecommerce solutions.
Lutke explained how the new funding will help future success of the company:
“This large investment will allow us to aggressively expand operations with a focus on three areas of growth. First, we’re looking to continue hiring the best developers and designers in the world. Second, we would like to open the door to strategic partnerships and acquisitions. Lastly, we will provide seed funding to developers looking to build apps that integrate with the Shopify platform.”
The seed funding mentioned is officially named “The Shopify Fund,” which is a $1 million fund to encourage independent developers to write apps for the Shopify platform. This fund will help the company attract developers, designers, and entrepreneurs by allowing Shopify to pay those with intriguing app ideas or designs. A $5,000 to $10,000 advance will be paid out to those who contact Shopify with a great app or utility design or idea. Designers can contact Shopify even if they don’t have a potential app idea as the fund will also be used to hire on talent to help create items on the fund wish list.
Shopify currently has nearly 100 applications already on their platform. The apps and utilities will be made available to Shopify customers as a tool to expand their ecommerce solutions.
The ecommerce platform is also currently in the midst of their annual Build-A-Business competition, which is an 8-month contest to encourage entrepreneurs to create an online startup company. Upon conclusion, the startup with the most successful 2-month average will be awarded a $100,000 check along with trips to California and New York City to meet with several industry experts.
Monday’s announcement comes just 10 months after their announcement of $7 million in fundraising this past December.
October 17, 2011
By Tina Brandon, Vice President of PayNetSecure.net
Happy Guest Blogger Monday! This week our guest talks about establishing the high-risk merchant account that’s right for your ecommerce solution. Without this knowledge, you might be at risk yourself–for winding up without a merchant account. VP of PayNetSecure.net Tina Brandon guides you through four steps to ensure your business stays safe and your accounts stay open.
Has Your Ecommerce Business Been Labeled “High Risk”?
4 Steps to Getting the Right High-Risk Merchant Account
The lifeblood of your ecommerce business is the ability to accept payments from your online customers. In the last 9 months, banks have been shutting down merchant accounts for many ecommerce businesses because the banks are mitigating their risk. Even if the merchant has good processing history, low charge-backs and fraud, you can find yourself cut off.
There are a lot of sharks lurking in murky waters of high-risk merchant processing that take advantage of unwary business owners. Here are 4 ways to protect yourself.
1. Establish a Direct Account. Any business with high-risk credit card processing volumes of $50,000 or more should establish an account directly with an acquiring bank. It takes a little more paperwork to set up a high-risk merchant account with a bank compared to using a third-party payment processor but the benefits are worth the extra effort.
A direct high-risk merchant account eliminates the middleman and protects your cash flow. With a direct account, all settlement money is sent directly to you from the bank, providing faster and safer deposits.
2. Avoid Application or Setup Fees. Stay away from high-risk merchant account providers who charge setup or application fees. Typically the “middlemen”/third-party processors are those that charge setup fees.
Reputable firms that establish high-risk accounts are registered agents and get paid by the acquiring banks. Although there may be some fees associated with establishing high-risk merchant accounts, those fees are assessed by the banks or card brands and should be paid directly to them, not to an agent.
3. Establish More Than One Merchant Account. Any high-risk merchant processing more than $100,000 per month is wise to establish more than one account. Redundancy and backup is critical for any business but especially so for high-risk merchants. Companies should consider setting up more than one high-risk account, perhaps in different jurisdictions, to safeguard cash flow from card payments.
We all know the saying “Don’t put all your eggs in one basket,” and this is especially true for ecommerce businesses. Diversifying your processing with multiple banks creates an environment where banks are competing for your business. This drives your fees down and profits up.
4. Interview the High-Risk Merchant Account Provider.
It’s amazing how many companies don’t answer their phones and don’t respond to voicemail or emails. Take your time to call the companies and interview them as you would a new hire. Judge the level of customer service and responsiveness.
About the Author
Tina Brandon is the Vice President of PayNetSecure.net and has been in the banking industry for 17 years. She is an expert in the payment processing community and assists high-risk and global companies with merchant accounts. If you would like to get more information about payment processing for your ecommerce business, you may call her at 718-250-4681 or email her at email@example.com.
[If you're interested in being a guest blogger on the ZippyCart blog, check out our Official Submission Page.]
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