Running an eCommerce business entails implementing a robust business model that accounts for various arms of the operation, with one primary one being how payments are handled.
eCommerce businesses deal with a revolving set of customers and orders, both one-time and recurring. This diverse range of customer needs naturally increases the complexity of the payment structure on both the business and customer sides.
With that said, there are plenty of payment processors and strategies that can simplify the payment structure of this type of eCommerce business. Not only do these tools help speed up operations and recordkeeping, but they also increase the accuracy of each record, ensuring that operations are cleanly tracked and recorded.
If you’re on the lookout for ways to streamline your eCommerce business’s customer payment protocols, then you’re in the right place. In this article, we’ll give you some helpful insights on how you can accept customer payments more efficiently for your eCommerce business.
Let’s jump right into it.
Streamlining customer payments is an essential operational practice because it helps reduce friction in the payment process.
When payment processes are unoptimized and riddled with unclear steps, customers may feel frustrated about the whole ordeal. This can cause them to leave a bad review, spread negative word-of-mouth, or never choose to shop with your business again.
Besides stakeholder dissatisfaction, your own internal records may not fully reflect the accurate inflow and outflow of cash and receivables.
When transactions aren’t properly reconciled, your business won’t have a clear understanding of its cash statements. This can make it even harder to forecast revenue accurately or create a more reliable financial system, as the present one remains muddled.
In short, failing to streamline customer payments can bottleneck your business’s growth potential. This can reduce the profit ceiling potential of your eCommerce business and cause your team to expend resources and time correcting errors instead of focusing on other parts of the operation.
As this is the case, it’s essential to take the right steps to ensure that you’re making it easy for your customers and team members to undergo the payment process, as well as any follow-up actions that they may need to take.
Let’s take a look at how you can do it in the next section.
We’ve established the importance of streamlining an eCommerce business’s payment structure in the previous section. This then begs the question: how do we start implementing it in the first place?
Without further ado, here are some ways you can streamline customer payments for your eCommerce business.
One of the most effective tools you can invest in to create a proper customer payment scheme is a POS terminal.
This terminal allows customers to quickly pay their balance using virtually any accepted payment method, whether that’s a debit card, a credit card, or a contactless payment method. That’s handy if you sell in person at markets, pop-ups, or trade shows in addition to your online store.
This structure works well for eCommerce businesses because of the various, customizable pricing schemes that each customer is subjected to. It’s not unreasonable for eCommerce sellers to collect deposits, custom order fees, late payment fees, restocking fees, or balance payments of some sort at the point of sale or after fulfilment.
Having POS terminals on hand allows these payments to be made seamlessly and deducted per transaction. On top of that, these terminals can also be synced with online accounting tools to make payment records even easier to reconcile and track. Receipts can also be generated as proof of billing for both the business and customer.
In essence, this payment terminal provides eCommerce businesses with a scalable solution to enhance their payment processes. This page goes into greater detail on how to compare the top EFTPOS terminals you can find in the market.
Another helpful tool that you can invest in is an online payment gateway. Having a method of payment integrated into your website — whether through your checkout page or an invoice link — can help streamline payments by giving customers a mode of payment they can use no matter which sales channel they buy from.
With this online tool, customers can pay through their preferred payment method, such as card payments, digital wallets, bank transfers, or even cryptocurrency if you have the account set up to accept it.
This tool can also make it easier to collect deposits and confirm custom or wholesale orders, reducing the need for manual follow-ups to customers who may be interested but haven’t completed their purchase just yet.
Online payment gateways can also improve recordkeeping, as each payment can be tracked and synced to the accounting software of your business’s choice automatically. This helps monitor customer payments and pending payments accurately and quickly. It also helps notify your team about pending charges or refunds that have been made.
For an eCommerce business, an online payment gateway allows your business to manage payments more readily. It prevents the need for manual invoicing or processing payments one by one, which opens the door for more flexible and scalable payment solutions over time.
Another tool that can expedite the customer payment process considerably is accounting software. The two aforementioned tools can help collect payments, but the chosen accounting software is the main system where these transactions are organised, recorded, and reconciled.
For eCommerce business owners, accounting software can provide features such as invoice generation, balance tracking, and refund monitoring. This simplifies tracking the status of each customer’s pending payments and whether the cash flow of the business as a whole is in healthy shape or not.
Some well-known accounting software that can work well for a business like this include Xero and QuickBooks.
Xero offers invoicing, payroll, and account management tools on the cloud, making it a great all-in-one solution to support payment tracking for both customers and employees. QuickBooks is another popular option that offers the above plus report generation, making it a good tool for small businesses.
This software can also be integrated with your sales channels — like Amazon, Shopify, or Etsy — and your payment gateway of choice. This helps you create a system that makes recording customer payments more accurate and easy to track, no matter the underlying complexity of the order.
Beyond investing in the right tools to handle customer payments, you should also create payment processes that both your team and customers can follow. Here are some tips that can help you with that:
Set clear payment terms: Let customers know when payment is due and what payment methods are accepted to complete a purchase from your store. Also, let them be aware of any return, refund, and cancellation policies you have.
Automate invoices and reminders: Use software to follow up on reminders and invoices to customers so that they’re aware of how much they owe. This also helps keep your team from chasing individual customers for payments.
Offer flexible payment options: Customers have different payment preferences, and it’s best to cater to a wide range of them by accepting different payment methods, such as bank transfer and credit cards, to make things more convenient for them when checking out, within operational reasons.
Keep payment records in one place: Store all customer payments, invoices, and refunds in one place for easier report generation.
By leveraging both these tips and the right tools, your eCommerce business’s payment policies should be smooth, trackable, and free from disputes. All the best in creating such a system for your business!
Disclaimer: This article is intended for general informational purposes only and should not be taken as financial advice. It does not account for your personal objectives, financial circumstances, or specific needs. You should seek independent professional advice before making any financial decisions. Any references or links to third-party products or websites are included for general information only.
EcomBalance is a monthly bookkeeping service specialized for eCommerce companies selling on Amazon, Shopify, eBay, Etsy, WooCommerce, & other eCommerce channels.
We take monthly bookkeeping off your plate and deliver you your financial statements by the 15th or 20th of each month.
You’ll have your Profit and Loss Statement, Balance Sheet, and Cash Flow Statement ready for analysis each month so you and your business partners can make better business decisions.
Interested in learning more? Schedule a call with our CEO, Nathan Hirsch.
And here’s some free resources:
Huge thanks to Westpac for collaborating on this post!
