Why Getting Paid Faster is a Winning Strategy for Improving Your Cash Flow

When it comes to cash flow, getting paid faster is always better. Faster payments mean you have more cash on hand to cover expenses and make future investments. 

If you are signing up for your first card machine or reviewing your current contract, consider the time it takes for funds to settle into your bank account and how it can affect your cash flow. 

Settlement time

While settlement time differs from one provider to another it typically takes 3-5 days for authorised card payment transactions to be sent to the acquiring bank for payment into the merchant’s bank account. If cash flow is a priority, as it often is with small and medium sized businesses then waiting 3-5 days to receive card payment funds to your bank account just won’t do. However, next day settlement speeds up the delivery of funds to your bank account.

That's why next day card payment settlement is such a valuable tool for businesses in the retail and hospitality industries. With this service, you can receive funds to your bank account by 10am the next working day. Usually, card payment providers will settle funds the next day for transactions made from Monday and Thursday. So, card payments taken on Friday, Saturday and Sunday will settle on the following Monday. However, some providers now offer next day settlement 7 days a week for no extra charge. This improves your cash flow by providing more immediate revenue and helps you keep your business running smoothly. 

Benefits of next day settlement

When you're paid faster, you have more cash on hand to cover expenses. This is a key concern for the daily running of a small or medium sized business. Your staff, contractors, suppliers and landlord all welcome prompt payment. 

Healthy cash flow is an indication that you're running a sustainable and stable business. It helps to improve forecasting, so you’ll be able to reinvest that money back into your business for growth.

Next day settlement has the advantage of making reconciliation easier, helping you to spot errors and rectify them quickly.

Tips

• Before signing up for your new card payment machine enquire about settlement time and consider if this matches your business needs.
• Research providers who offer next day settlement at no extra cost. These days swift settlement should not come at a cost to you and your business.

The reality is that we all need money sooner than later for our businesses to stay afloat and grow, which isn't always easy when card payments settle into your bank 3-5 days later. So, if you're looking for a way to improve your bottom line, next day card payment settlement is definitely worth considering.