When we hear the word ‘payment’, we understand it as the transfer of money in exchange for products and services. When a payment is made for business purposes, it is called a business payment. As everything is digitised these days, we have ample options for business payments.
But this was not the case a decade ago. For any business transaction earlier, people had to use cash. When the payment was bigger, managing a large amount of cash was a big task. Later, the facility of payment by cheque arrived which made this kind of business payment much easier. But in recent times, making business payments has become easier than before, with plenty of options for a payment gateway available online. In this blog, we shall discuss business payments in depth.
1. Payment Options
Making and receiving payments is an essential part of handling a business. With technological advancements, we now have a variety of options to handle a business payment which one can choose as per their convenience. One can either pay by cash, by debit or credit card, or through an online payment mode. To make business payments easy, several online payment options are available to users. These payment options and gateways allow for quick payment processes.
2. Types of Business Payments
The different modes through which business payments can be performed are:
- Cash – It is one of the easiest and earliest payment options. It is also the most preferred method by a majority of people because no extra fee is required to make or accept the payment. However, people avoid making large payments by cash as keeping such an amount at hand could be inconvenient. Counting a large sum of money is also time-consuming and there is a possibility of human-error while doing so.
- Cheques –This is the safest way of making a business payment. With cheques, you can easily perform larger purchases and no external fee is required to accept them. Once a cheque is deposited, the bank checks the amount and deposits the money in your account.
- Debit, Credit and Prepaid Cards – This is one of the most convenient ways for making a payment as all you need is a compact card. You can make large sums of payments with the help of debit and credit cards. For this mode of payment, a transaction fee is sometimes charged. One can withdraw cash from ATM machines with the cards as well.
- Mobile Payments – With mobile payments, one can easily make small and large payments online. This is a quicker and convenient way to make payments. There are many business payment gateways for mobile payments, with the help of which one can pay sums of money successfully. For this, an external fee is charged. Some of the most popular payment apps are PhonePe, Google Pay, PayTM etc.
3. Banking Services
Banking services play a crucial role in making business payments. Cheque books used for making payment by cheque are issued only by the bank. Debit and credit cards too are linked to individual bank accounts. To make a payment using a mobile payment gateway, a linked bank account is necessary. Thus, we can say that banking services play a huge role in making business payments.
4. Managing Cash Flow and Expenses
For a business to run smoothly, it is important to manage cash flow and expenses. For every business organisation, managing cash flow is always a big task. Here are some tips to manage cash flow and expenses:
- Monitoring your daily cash flow and expenses will help you to get a better idea of your expenditure
- Make a well-planned budget and stick to it
- Try to clear all debts as soon as possible
- Try to cut off all unnecessary expenses and cash flow and get full information of the field you are investing in before investing wisely
- Always pay taxes on time and plan your expenses in such a way that it does not hamper your tax payment
- Have proper recipes of all expenses so that you can audit your cash flow
- Have a good business credit which then allows the company to borrow money that can be used to purchase products and services. A good business credit score helps the owner to get a loan approved easily. Business credit speaks about a company’s ability to buy something first and pay for it later.
- Use a payment gateway that can process a business payment in a quick manner
5. Profit and Loss
When revenue generated by a business exceeds its expenses, it is called profit and when the revenue is less than the expenses, it is called loss. A person runs a business to earn profits. The amount of profit an organisation has earned is judged by its income statement. A business statement shows the amount of profit a company has earned over a specific period of time. Usually, an income statement is produced quarterly or annually. To know the revenue, expenses and profits of a company, a financial report called profit and loss statement is used.
The profit or loss shows whether a business is running successfully or not. To earn a profit, a business organisation should serve their consumers well.
6. What are integrated payments?
We should always go for integrated payments because they are the quickest way to make payments. Also, they are much more secure and reliable than other modes of payments. These integrated modes of payments keeps record of payment history which is very beneficial to track the expenses.
7. Role of Bikayi to enhance SME and MSME:
SME is Small and Mid-size Enterprises while MSME is Micro, Small and Medium Enterprises. Both SME and MSME benefited from the new trend of online business payments. The online payment gateways have made the payment process easier and because of frequent payments, SME and MSME are receiving huge profits.
As Bikayi is India’s leading e-commerce enabler, it provides a platform for SME and MSME to grow their business. Bikayi also provides various options for online payments which helps these businesses grow faster.
8. FAQs on Business Payments
What are the modes of payment in business?
Ans. The different modes of payment are:
- Debit cards
- Credit cards
- Mobile payments
- Electronic bank transfers
What is a business payment?
Ans. When a payment is made for business purposes, it is called a business payment. For any business, payment is a crucial process as without payment, the transaction would not be successful.
What are various options for mobile payments?
Ans. There are many options for mobile payments by using which you can perform business payments. Phone Pe, Google Pay, PayTM are few commonly used mobile payment apps.
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