Our world is becoming more and more mobile with electronic transactions taking place at all levels of the business chain. Being able to collect the payment at the “point of sale” used to be possible by retail outlets only. Today, with new mobile payment options, a payment at the “point of sale” can be made anywhere there is cell phone coverage. This is an instant simple, secure and affordable process that improves the service level. In the “good old days” your driver would pick up a check from the customer upon delivering a portable storage container for rental or sale. The check then had to be delivered to the bank for deposit sometimes with a hold placed on payments from questionable accounts. Today, with the right tools,the check can be processed into an electronic payment that is credited to your bank account and entered into your accounting system instantaneously at the delivery site.
Mobile Credit Card Readers
There are a number of systems available for instant payments. The most commonly used is the credit or debit card. It’s not a recent phenomenon but what’s new and revolutionizing is the ability to collect the payment and issue a receipt to the payee via your smart phone.
The ideal solution is to have an app that can integrate the payment with your accounting systems as well as issue an electronic receipt to the payee. QuickBooks by Intuit seems to be the most commonly used accounting system in our industry and Intuit offers a product for credit card payments called Intuit GoPayment that attaches to your IPhone or Android phone. You can subscribe to this service with a monthly subscription fee and a minimum transaction fee or use, as needed, and pay a higher transaction fee. The fees range from 1.75% to 3.75% of the transaction amount. While it is an expense, your collection is completed and accounted for with the swipe of a credit card at the point of sale.
If you go this route, make sure you select a product that protects the payee’s credit card number. There are regulations that stipulate the use and storage of credit card numbers. Most major vendors have addressed this issue but you want to make sure it’s there so that you are protected in case of misuse by your employee or anyone else in the event your phone is lost or stolen.
Remote Check Collection
Remote Check Collection is a service that allows you to deposit a check to your bank account by simply taking a picture of it. More and more banks have apps for this service; first of the large consumer banks to market this service are Chase and PNC. We can expect other consumer banks to follow shortly. If your bank doesn’t offer Remote Check Collection yet, look into using PayPal’s phone app. PayPal acts as an intermediary between your smart phone and your bank account.
Using remote deposit is quite easy. You endorse the check you receive from your customer and then use the camera on your smart phone to take a picture of the front and back of the check. The banking app will make sure you have a quality snapshot and then send it to the bank. Some banks will give you instant access to the funds while others will make you wait for the funds to clear. If you set up this function for your drivers to use, make sure they are limited to only making deposits to your bank account. You don’t want to give them additional features such as seeing balances, making payments and or transfers.
Collection of Payment via ACH
ACH stands for Automated Clearing House and is an electronic network for financial transactions within the United States. Most banks offer this system to their commercial customers.
Having ACH capabilities allows you (the vendor) to access your customer’s bank account and withdraw funds. ACH is a very practical way to collect reoccurring payments and lends itself well to a portable storage rental company.
Using ACH services requires some documentation between the vendor and his customer. Typically that is done with an ACH agreement that specifies the customer’s bank, the banks ABA number and the customer’s bank account number as well as authorizes the vendor to withdraw funds from the account. The agreement can be very specific with regards to frequency, amounts, days of withdrawal and the term of the agreement. It can also be very generic, authorizing the vendor to collect funds in general. I recommend that you have a clause in your standard rental agreement that gives you the authorization to do generic collections via ACH and that there is space to fill in the customer’s bank information. It is understandable that customers are concerned with a generic authorization, but they are well protected by the vendor’s bank who should adhere to the rules of NACHA (The Electronic Payments Association) and the Federal Reserve Bank. These rules make the vendor’s bank put a limit on what can be collected by his client. The collecting bank is also responsible in case there is unauthorized use of the services by the vendor and will reverse incorrect collections. Dealing with a dispute is as easy as objecting to an incorrect credit card charge or putting a stop on a check.
Today’s provider of portable storage containers for rent is in an increasingly competitive environment. The industry figured out a long time ago that service, not price, is the way to win customers. Therefore, looking forward and adapting new solutions to make the business process easier and faster for the customer as well as reducing the administrative routines is a way to stay ahead of the competition.
Resources:
http://www.gottabemobile.com/2011/06/13/9-banks-with-iphoneremote-check-deposit-apps/
https://www.nacha.org/
http://intuit-gopayment.com
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