Power of cash and immediate payment methods in business!
Published On March 1, 2023 » 3557 Views» By Times Reporter » Business, Columns
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The 21st Century has evolved so much that even methods of payments have been changed.
Today the development of technology has propelled most business owners to accept electronic payments by means of credit and debit cards, digital wallets, mobile payments and other form on non-cash payments.
While policies differ per business, some have opted to go entirely cashless, others prefer cash only, but many accept both digital and cash including any other methods.
However, the most acceptable form is cash and it is not going away anytime soon because it is an acceptable method worldwide depending on a country’s policies.
Those who have strictly stuck to cash business only often deal in small quantities and low prices.
This is a common practice with supermarkets that sell foodstuffs and other groceries because of the affordability and ability to be paid up front.
Cash business has an economic advantage of returning the cost of investment and profit from each item that you sell and paid for immediately.
In this case the process of waiting is eliminated in that the middle man who gets a cut in the transaction is removed.
In economic hardships not everyone has cash all the time, this limits the number of customers and affects profitability as well.
With cash there is assurance of steady streams of income that will enable the business to have funds for restocking without delays.
Cash business automatically reduces fraud cases and it is an easy means of managing or accounting for cash inflows and outflows.
Some countries accept smaller amounts of cash but encourage non-cash transactions because making huge sums of money is regarded as old fashioned.
Cash business has disadvantages as well in terms of receiving counterfeit notes, limiting customers to access your merchandise and services, limiting your profit in terms of time value for money compared to those who increase the price or add interest to the products or services being offered when payment is delayed.
Since cash is carried physically for payments, it helps in reducing impulse buying because you only spend in accordance with what you have on hand, it limits you from exceeding your limit unlike digital money where you can spend without realising it immediately.
Businesses tend to differ because what may work for one business may not work for another.
However, in the 21st Century, a few resilient business owners accept credit from credible customers as well as other methods as a well of expanding their customer base.
They weigh the benefits of accepting different methods of payments provided there is a paper trail of documents to show the transactions.
Peak performers set goals that they need to achieve and as such they spread their wings by accepting any forms of payments.
For debit cards, mobile money and other digital methods, payments are almost immediate if the systems are operating effectively.
Resilient entrepreneurs act fast, move with time and embrace every business opportunity that they feel will make them achieve their goals.
On the other hand, those who accept cash only, are skeptical about receiving other methods due to the risks involved with other methods such frauds, non-payment by creditors etcetera.
These are often risk averse and are comfortable operating that way.
For small amounts such as perishable goods, this is obvious that cash or swiping is inevitable, and it makes sense to avoid tying small amounts in debt which may put your business in unnecessary pressure.
Nonetheless, the way you control and manage your business to optimize your profit matters, and it has different effects on different businesses.
For Comments: email jeanmushala@gmail.com, Mobile: 0976132835/0966751626

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