Despite the availability of several newer and more efficient payment systems, many construction businesses don't accept card payments for their work. This article will discuss some things keeping general contractors from accepting card payments.
Further, we'll discuss how construction business owners can overcome obstacles to access the advantages of more efficient payments.
How are contractors accepting payment?
Can you imagine paying for your daily expenses like gas and groceries with cash or checks? Most people can't – instead, they rely heavily on digital payments and credit cards as the preferred payment methods for most things they buy.
However, contractors and other small businesses still rely heavily on checks to get paid and to pay for their expenses. One survey showed that well over half of business-to-business payments were still made by check, despite the fact that checks are less secure and far less efficient than more modern payment methods. Why would construction businesses avoid card payments?
The challenges to accepting card payments
There are a few reasons why contractors may avoid accepting credit card payments for their work. In some cases, it's a fear of change itself. In others, the decision may be based on outdated information or myths about credit card payments. Here are a few challenges contractors believe they may face if they accept credit cards.
The cost
Contractors live on tight budgets and thin margins. Any extra expenses are cautiously approached – including merchant fees on credit cards and charges from your credit card processing provider. However, crunch the numbers and you may find that credit card transactions are cheaper than you think, and checks are more expensive than you may realize. This is especially true when you work with a payment processor like Truss.
Contractors can now accept credit card payments for free: Through Truss, customers can choose to pay for free via ACH bank transfer, but if they choose to pay with cards, you can pass on the added fee to your customer - no payment processing fees are charged to the contractor.
Setup hassles
There is no setup to using checks or cash. It's simple: a client can hand you payment, and you're done! In contrast, accepting credit cards seems like an administrative nightmare.
Truss makes contractor credit card processing easy: setup is quick and free. Truss integrates easily with accounting software to make the switch even simpler.
Security concerns
Many contractors mistakenly believe online payments must be less secure than cash or checks. The confusion is understandable – cash and checks are physical objects, while cards and online payments rely on the digital movement of money.
While online payments are less tangible, it's actually checks that represent the greater risk of fraud for businesses. Reports of check fraud more than doubled in some areas between 2021 and 2022.
In contrast, credit card processing companies can offer better payment security. Truss is partnered with Thread Bank; Member FDIC to provide $3M in FDIC insurance1. Tight controls on personal data from you and your customers, including credit card information, is managed through a secure payment portal. By offering to accept card payments, your clients receive better security than if they paid with checks.
The benefits of accepting cards
Any change can be challenging for a company with well-entrenched behaviors, especially when those behaviors appear to work just fine. But accepting credit cards for construction payments is a small adjustment that can reap big rewards. Here we'll discuss a few advantages of accepting cards as a payment option.
You get your payments faster
Cash management is hard enough in the construction industry, given the constant expenses that crop up on each project. Delayed payments make it hard to pay the bills, hire the labor, and keep the work moving.
Delays are baked into check printing, signing, postage, and bank clearance. If your client is paying you through checks, it could be two weeks before the payment funds are available in your bank account. That delay can be costly for your business operations.
Truss is the easy and faster way to accept construction payments. Through Truss, you can access funds the moment your client makes a payment, whether they pay through ACH or by credit card.
Your client's preferred payment method
Contracting companies work very hard to deliver value to their clients throughout a new project's planning, design, and construction. This level of customer service should extend through invoicing and payment options.
Customers expect detailed, timely, and accurate invoices. Likewise, they'd like fast and convenient payment systems to settle the bill.
Cashless and mobile payment solutions have been increasing for the past couple of decades, driven by the desire for convenience, security, and the increased ability to monitor spending through credit card companies. By offering both ACH and credit card options through a payment service provider like Truss, contractors offer improved flexibility and convenience for their clients, many of whom would prefer to leave checks in the past. Truss supports mobile credit card processing, allowing your clients to pay invoices from anywhere, anytime.
Better efficiency and easier bookkeeping
Free your office staff from repetitive payment entries across systems. When clients pay by card through Truss, the payment is automatically marked paid in your QuickBooks Online account, too.
Paying by card means no more picking up checks or driving to the bank for a deposit.
By creating more efficiencies throughout your payables and receivables tasks through a credit card processing solution, you're freeing up office staff to create more value for your company. Mind-numbing entry and re-entry across systems is tedious and, in many cases, error-prone.
Your contracting business should accept credit cards
Checks are old news. They are expensive, time-consuming, and prone to security breaches.
Yet many construction companies have held out on accepting credit card payments because they believe credit card fees to be costly, or credit card processing systems to be difficult to set up.
Now with Truss, contractors can give their clients the choice between paying with ACH or with credit cards at no cost to the contractor. Set up is simple and free. To make things even easier, Truss integrates with QuickBooks Online for greater efficiency and simplified bookkeeping. When clients pay with credit cards, contractors can access funds instantly, with no running around to collect and deposit the money.
Get started with Truss for free to get set up to accept card payments for your contracting business today.
