20 Jul Keeping a Separate Bank Account for Credit Card Settlements
As a business owner, you understand the importance of accepting credit card payments from your customers and clients. While cash and check payments may have been most common as forms of payment years ago for goods and services purchased, many people enjoy using credit cards and debit cards for payment today. This is a convenient method of payment that is often preferred over cash or check payments. In order to accept this type of payment from your customers, it is necessary to set up merchant accounts. However, it is also imperative that you understand how credit card processing works.
Any time a customer makes a purchase with a credit card, the purchase will need to be made through merchant accounts at your store. Then, the transaction will be posted with a payment processor. After passing through the payment processor, the funds will be transferred into an account so that you will have access to them. The type of merchant account that you have as well as your bank’s rules and regulations regarding merchant accounts and funds transfers will affect the speed of this process.
However, it is important to note that monitoring payments for credit card settlements is important. You want to ensure that all funds that you are owed are transferred into your account in a timely manner. One of the most simple steps that you can take to streamline and simplify this process is to open a separate bank account to handle your credit card settlements. The sole purpose of this account will be to collect credit card payments made to your company and to transfer those funds out to your main business account. Because no other transactions will be posted to this account, you can easily monitor the amount of funds that have been deposited into your account over a specified period of time. This makes it easy to determine the amount of funds outstanding to you and to identify if a problem with the credit card processing has occurred.
The fact is that issues with credit card processing may occur infrequently, but they can be costly when they go undetected by a company. Monitoring the processing of credit card payments as they are deposited into your account is one of the best steps that you can take to ensure you receive the funds that you are entitled to, and opening a separate bank account for this purpose can make it easier to accomplish this task.