Author Archives: hostmerchantservices

Top Free Payroll Software Choices for Small Businesses

Payroll software can help a business work out payroll calculations and deductions much faster, saving time and money. Not only that, but the right software choice can also help properly structure your business operations to maximize efficiency. However, some of the options available might be cost-prohibitive for smaller businesses.

Luckily for you, there are some excellent payroll software options out there that are completely free.

The following article will go over five free payroll options with outstanding features, along with six paid payroll software options with free trials, and tips on how to choose the right payroll software for you.

Top 5 Free Payroll Software

In choosing these payroll software options, we considered their functionality, upgrade options, upgrade pricing, and advantages.

Here are the top 5 free payroll software options available today:

Payroll4Free

As its name implies, Payroll4Free is a free payroll tool. You qualify for free access to essential services if you have 25 or fewer employees. Payroll4Free has a full set of functions that can make payroll processing easier, even at its most basic level.

It allows customers to pay both W2 and 1099 employees. Furthermore, the software can issue checks and calculate federal, state, and local taxes. Payroll data can also be exported for integration with accounting and banking software, such as Quickbooks.

Both employers and employees can use the Payroll4Free portal and reporting features to track sick days, vacations, and other PTO. Pay stubs and W2 forms can also be printed directly from the platform, saving small business owners time and resources.

For small businesses with fewer than 25 employees looking for a simple payroll solution that gives them the tools they need to succeed, Payroll4Free is the ideal solution. Small businesses that need to invest in other areas of their operations need free options that offer features like direct deposit and a self-service portal. Payroll4Free is the best overall payroll software option for small businesses that require minimal functionality and a user-friendly design. However, if your company exceeds the 25-employee limit, you may want to look at other paid payroll software options.

Features

By displaying advertisements within its software, Payroll4Free provides its basic services for free. With Payroll4Free’s free plan, you can process payrolls and direct deposits without upgrading to a higher-tier plan. Payroll4Free offers the following features for free:

Direct deposits and paper checks
Tax breaks
Tracking vacation and time off from an employee’s dashboard
Customer service
Employee enrollment

Pricing

Payroll4Free charges employers $25 per month if they don’t want to deal with submitting payroll taxes themselves. They provide free tools as a basic service to make this process easier. Despite its name, Payroll4Free hides two optional services behind a paywall.

Payroll4Free charges an additional $25 per month if you choose not to use your bank to transmit direct deposits to your employees. Bundling Payroll4Free’s direct deposit and tax services for $30 per month will save you money.

Pros

Tax calculations and direct deposits are provided at no charge.
Providing unlimited customer service
Strong security aspects
Pre-filled tax forms

Cons

Only available for Windows
Direct deposit through Payroll4Free’s bank is not free.

HR.MY

For any company, managing staff around the world is a huge undertaking. HR.my supports 67 languages, so it is ideal for global teams needing basic payroll processing and management capabilities.

HR.my accepts payments by direct deposit, check, and cash. A company can assign payroll tasks to various managers using a role-based user access control tool. Employees can also use the portal to input their hours worked, request PTO, print pay stubs, and check vacation accrual, among other functions. Users can also import expense reports and timesheets and distribute documents using the software’s workflow capabilities.

Payroll software for small businesses and HR managers will appreciate HR.my’s support for dozens of languages. Firms without mature payroll systems will benefit from the program’s HR and payroll services, leave management, and expenditure reporting. Additionally, because HR.my offers unlimited user accounts, it is a viable payroll option for firms looking to expand staff numbers soon. The customer support provided by HR.my is provided via a user-supported forum, which may not be suitable for organizations that have never used payroll software before. New businesses should look for payroll software solutions that provide more comprehensive customer support.

Features

All HR.my features are free, and you do not need to subscribe to any plans to access additional perks. User community crowdsourcing enables it to operate for free, so you only need to sign up to take advantage of the service. Some of HR.my’s free features include:

Support for multiple pay intervals.
Attendance management tools
A time-tracking system
Self-service portal for employees
Software updates regularly

Pricing

HR.my is a great competitor to other purportedly free payroll software options, which often entail monthly fees and annual renewals. According to their home page, what you see is what you get when you sign up for them: Unlimited user accounts, time management, various pay schedules, a self-service portal, and more.

Pros

Support for 67 languages is available.
There are no restrictions on business size.
Flexible payment schedules
Strong security aspects

Cons

It does not comply with US labor laws.
Customer service options are inadequate.

eSmart Payroll

eSmart Payroll is a free payroll calculator that calculates payroll for hourly or salaried employees while taking into account 401k contributions and other deductions.

With eSmart, customers can print and download paychecks and pay stubs, which sets it apart from other payroll calculators. In states with more complex payroll taxes, such as Maryland or New York, you can use state-specific calculators to ensure that you withhold the correct amount.

eSmart is ideally suited for extremely small companies already capable of calculating payroll and filing taxes independently. eSmart Payroll may suit your needs if you are well organized and only need a solution for computing and printing payroll numbers. Most firms will find eSmart’s feature set too limiting, especially those expecting to grow rapidly. The tool may be a good fit for organizations new to payroll software if they want to test a simple payroll solution before moving on to a more complicated option.

Features

eSmart Payroll is more of a payroll calculator than a software package. Employers of small businesses can use eSmart to enter employee wages and administer their payroll. The eSmart Payroll calculator offers the following free features:

Printing of paychecks and pay stubs.
State-specific calculators
Pay cycles that vary
Easy access through the web
Withholding calculator for federal taxes

Pricing

Individuals and businesses can use eSmart Paycheck’s free payroll calculator. Users are encouraged to register an account when using eSmart Paycheck to avoid losing entered data, but you will not need to pay. Those who want tax filing tools must subscribe to eSmart Payroll’s premium service. The federal and state payroll forms are available through eSmart Payroll for a fee.

Pros

Withholdings can be customized.
Flexibility in the pay cycle
User-friendly interface

Cons

The features are limited.
The customer service is limited.
There is no assistance with tax filing.

Timetrex

Community Edition is a free alternative. It is an open-source platform maintained by volunteers from over 50 countries. Timetrex distinguishes itself by providing employees with online time and attendance tracking. Employees simply enter their hours online. Payroll data is directly linked to this data, making it easy to run the figures at the end of the pay period. Its ability to integrate time tracking with payroll software makes Timetrex a great choice for small businesses with hourly employees.

Timetrex’s Community Edition can calculate net pay, taxes, and deductions, among other aspects of payroll processing. As well as generating tax filings, Timetrex allows users to pay their employees via direct deposit or paper check. HR activities such as PTO requests and scheduling adjustments are also available.

TimeTrex’s free features are best suited to small, dispersed teams who require web access to time tracking. It is possible for businesses that use payroll software that they like to integrate it with TimeTrex and have it automatically sync with TimeTrex’s attendance monitoring. However, because TimeTrex lacks pricing transparency, companies needing urgent payroll solutions find it difficult to select a package that meets their needs.

Features

The most basic payroll features of TimeTrex are free under its Community Edition service plan. TimeTrex Community Edition is completely cloud-hosted, doesn’t require any downloads or installation, and offers several free features, including:

Payroll processing
Administration of human resources
Support for time and attendance in web browsers
Leave administration
Mobile app

Pricing

You must sign up for at least the Professional plan to use TimeTrex’s mobile app and on-site services in addition to its web portal assistance. The price of TimeTrex begins at $2.99 per month per user and goes up to a flat rate of $29.90 for organizations with up to ten employees. You will also need to schedule a demo with the company to learn more about the best plan for your organization since the company provides a plan comparison online but no additional price information.

Pros

ADP and QuickBooks are compatible with the software.
Assistance through the cloud for free
Web browsers allow employees to use the app quickly.
An automated multi-week scheduler is included for recurring or rotating shifts.

Cons

Tax preparation assistance is not included in the free community edition.
An opaque pricing structure
Payments to third parties and tax returns are excluded.

Excel Payroll

Excel Payroll Spreadsheets are a time-tested and useful tool for setting budgets and performing calculations. With Excel Payroll, you can save money if you’re currently doing payroll with spreadsheets or Microsoft Excel.

Excel Payroll can calculate payroll when you enter employee information, including earnings and deductions. Checks and tax forms can also be printed, as well as records of workers’ compensation and 401k contributions.

Small businesses familiar with spreadsheets and who wish to use essential payroll services such as printing W2 forms and checks in a spreadsheet format should consider Excel Payroll. Excel Payroll integrates directly with the Excel app, so you don’t have to worry about developing a spreadsheet from scratch as Excel Payroll does it for you. Excel Payroll will behave like payroll software if your company has access to a licensed version of Office 365 or is willing to subscribe to a new plan.

Features

Excel Payroll aims to produce an Excel-based payroll solution that does not charge a monthly fee or impose any other charges. Installation is also free, so you won’t have to worry about extra fees. Excel Payroll offers a comprehensive range of dependable payroll tools, including:

Forms tax returns
Vacation accumulation
Pay deductions
Check printing
Time-tracking
Accounting entries

Pricing

While Excel Payroll isn’t free because you need to obtain a licensed edition of Microsoft Office Suite to use it, no further payments are required besides the Office suite license.

The Microsoft 365 Business plan, which costs $8.25 per user per month, is the most affordable of the cloud-based plans that include Excel.

Pros

Reporting features
Easy to use with Microsoft Excel
The customization options are extensive.

Cons

Handwritten entry
Taxes and benefits are not administered.
There is no compliance with the Affordable Care Act (ACA).

Best Payroll Software with Free Trials

Before purchasing a subscription, you can test the following payroll software solutions for free:

Gusto

This outstanding payroll and HR software is free to use until you are ready to manage payroll. Gusto AutoPilot, a cloud-based system, can fully automate tax calculations and filings, providing 24-hour notifications and submitting payroll on time if you forget. The Core plan allows clients to manage payroll deductions, garnishments, and additional revenue with the most basic subscription.

Patriot Payroll

Patriot offers two programs, the most basic of which costs $10 per month + $4 per employee. As well as payroll services such as direct deposit and W-2s, both programs have HR and Time and Attendance modules. The company’s clients, which also provide accounting software, can use their payroll platform free for 30 days. Patriot is completely online so that you can run payroll from anywhere you have an internet connection and a web browser. It also provides free U.S.-based customer support.

OnPay

By presenting a single basic cost instead of many plans, OnPay’s approach eliminates confusing pricing systems. A 30-day free trial is available. OnPay’s robust payroll and human resources tools make it a suitable solution for larger companies and vertical industries. In addition to being powerful, user-friendly, and reasonably priced, OnPay is also a great option for small businesses.

Wave Payroll

This platform is known for its free accounting software, as well as flat prices instead of a variety of options. Customers can test its payroll software for 30 days for free. The accounting and payroll apps can be used independently, but the fact that they are integrated is a great benefit for small firms on a budget.

QuickBooks Payroll

There is a free 30-day trial and a 50% discount for three months for those interested in purchasing this software. The Core Payroll feature of QuickBooks Payroll calculates paychecks and taxes and provides reports and next-day transfers. Enhancements to premium or elite include automated payroll, enhanced HR support, and time-tracking tools.

ADP

You need to go beyond the Essential RUN plan to handle HR through payroll. Small firms with 1 to 49 employees can choose ADP’s RUN plan. This software includes tax filing, direct deposit, new hire reporting, and payroll processing. As pricing and add-on costs aren’t publicly disclosed online, ADP will need to contact you for an estimate.

How to Choose Your Payroll Software

When deciding whether to purchase payroll software, business owners should consider the complexity of their state’s tax rules, whether they intend to expand their company, how many employees they have, and how much time they can devote to administrative duties. Similarly, avoid characterizing free payroll software as a temporary option; transferring from one program to another is a hassle and frequently time-consuming. As the company grows, free payroll software won’t be enough, and it will be better to invest in a system that can accommodate growth and is automated.

The lack of time tracking or expense claim management functionality can usually be compensated for by working with external software that may be better suited for the job. Managing payroll taxes is another matter. Overall, several things are both great and essential for business owners. These include:

Calculation of taxes and, ideally, tax filing options
Calculation of benefit deductions.
Direct deposit is preferred.
Effective time management.
Management of human resources
The ability to claim expenses.
Cloud-based system.
Intranet for employees.
Customer service by phone.
Extra features

Conclusion

While paying for a license or subscription to a payroll software might provide you with additional features not found in free versions, you can accomplish a surprising amount of work with the options on this list. If you have a small business that only needs standard payroll reporting, you can get by with a free option, provided that you don’t need to scale your operations. If you think you might require more features down the road, try one of the free-trial options instead.

A Comprehensive Guide to Cash App Business Accounts

If your small business is seeking a quick and easy way to collect payments or add another payment option for customers, a Cash App Business Account could be a solution. Also known as Square Cash, Cash App launched in 2013 as a peer-to-peer (P2P) payment platform. However, it expanded its services to cover business transactions in 2015.

This article explains how Cash App business accounts work for businesses and leads you through the process of creating a Cash App business account in detail. It also provides information about Cash Apps’ strengths and limitations to assist you in determining whether it is the best fit for your payment processing needs.

What is a Cash App Business Account?

Businesses can use Cash App business accounts to conduct transactions while abiding by the terms of the agreement and the law. With a Cash App business account, you can accept P2P Cash App payments, get customized payment links and QR codes, and receive unlimited cash. Additionally, it enables you to take payments via Visa, Mastercard, American Express, and Discover networks.

Cash App Business vs. Personal Accounts

Although business and individual accounts on Cash App are very similar, there are also some variations. Users with business profiles, for instance, must pay transaction fees, although those with personal accounts are exempt. There is no cap on the amount of money you can receive with a business account, which is another distinction.

The monthly cap for unverified personal accounts is $1,000. As a user with a business account, you can also accept payments from credit cards. Additionally, you can have both personal and company Cash App accounts, but you must register with different phone numbers for each.

The Basics of Using Cash App Business Accounts

While Cash App is well recognized for its peer-to-peer functionalities, you can also use it for commercial transactions. However, you must create an account before using the Cash App Business features.

After you create an account, you’ll get a unique username, sometimes known as a “$Cashtag,” which clients may use to submit payments to your business via the app. Cash App gives business users a payment page with a personalized URL in addition to the $Cashtag. Customers can send payments to you by clicking on a link on your website. $Cashtags function similarly to hashtags or social media handles. You can add them to business cards or marketing campaigns to inform clients that Cash App is one of your payment alternatives.

It’s also worth noting that if you’re a Square customer with a compatible hardware or software system, you can take Cash App as a payment option without a Cash App company profile. This post will cover this feature in more detail later on.

Cash App Business Account Charges

Even though Cash App business accounts have no transaction restrictions, accepting debit cards or Cash App payments with your business account will incur a 2.5 percent per transaction fee. You must also pay a 2.75 percent fee for credit card payments. Cash App business customers receive free quick deposits as well.

More crucially, beginning in 2022, the Internal Revenue Service (IRS) will require payment platforms like Cash App to report commercial transactions totaling more than $600. As a result, if you want to use Cash App as a payment option for your company activities, you might expect increased scrutiny in the future.

Cash App Business Account Limits

Cash App was not designed to manage high-volume transactions due to its origins as a P2P transaction platform. As a result, if you wish to use Cash App for more than just a low-volume sale payment method, you must verify your account.

The following restrictions apply to a verified Cash App business account:

Weekly sending restrictions of $7,500
There are no restrictions on the amount of money you can receive.
Daily Cash App direct deposit payout of less than $25,000

Unverified business accounts, on the other hand, can only receive $1,000 and send $250 weekly. You may, however, alter your transfer restrictions within the app by tapping on the account setting button in the upper right corner and then selecting ‘limits.’

How to Create a Cash App Business Account?

You must first create a profile on the website or app to begin using a Cash App business account. You must link your account to a phone number or email address. Then, Cash App will send you a confirmation message with a unique code through message or email, which you may use to access your account. After logging in, you must verify your first and last name and link a debit card to your account.

Cash App accounts are set up as personal accounts by default, but changing them to business accounts is simple. To convert your personal Cash App account to a business one, just adhere to the instructions below:

To view your account details within the app, tap the symbol in the upper right corner.
You can access your personal information by selecting the “personal” submenu at the top of the page. You can change your account type by scrolling to the bottom of the page and clicking that ‘change account type’ button.
Accept the confirmation.
Connect your bank account to your Cash App if you haven’t already.

Before or after changing your account from personal to business, you can verify it. Additionally, Cash App will urge you to authenticate your account the first time you attempt to exceed the limits of an unverified account. You will then have to provide personal information, including your complete name and social security number.

Can You Switch a Cash App Business Account Back to a Personal Account?

You can reverse your Cash App business account to a personal account by following these simple steps:

Open the Cash App application on your mobile device or website
Click the profile feature available on your home screen
Scroll to the bottom of your screen until you find the personal tab and click on it
Scroll down to find the ‘change account type’ feature and click on it
You will have to confirm the change
Your profile will switch from a business account to a personal account

How to Set Up and Use Cash App for Business Transactions?

To prepare your Cash App account for commercial transactions, you don’t need to take any complicated actions. Other Cash App users can start transactions by scanning the other’s QR code because Cash App works through payment links and QR codes. You can print out your QR code so that consumers can scan it instead of holding up your phone for every customer.

Clients can pay you without using Cash App which is another encouraging innovation. Simply generate a payment link or $Cashtag to send via SMS, email, or insert on your website. Customers can access your “cash.me” website by clicking this link, where they can either log into their Cash App accounts or input their name, email address and credit or debit card details.

How to Accept Cash App Payments Without a Business Account?

Before, Cash App had no connections to the Square ecosystem and operated independently. You might be able to accept Cash App payments without having a Cash App business account if you use Square as your payment processor. Compatible Square programs enable Cash App payment by default. You can disable this feature if you don’t want to provide a Cash App as a payment option for your business.

Some of Square’s products that support the Cash App include the following:

Square Point-of-Sale (POS) App for Mobile Devices
Square Terminal
Square Register
Square Stand
Square Online

Benefits and Drawbacks of Cash App Business Accounts

Small businesses that don’t require or want many features and don’t process many payments benefit the most from Cash App business accounts. However, setting up is quick and straightforward, so you can start receiving credit card and mobile payments right away.

Additionally, the payment method is simple, and all you need to access your money is your business account and $Cashtag—you don’t need additional tools or technologies. Furthermore, clients with Cash App accounts can send payments to you via the app by searching for your company using your $Cashtag, email address, or phone number. Also, you can make payment requests to clients who use the Cash App. The “cash.me” link allows anyone to make an online payment using a credit or debit card, further increasing functionality.

If you’re starting and can’t afford a sophisticated POS system, using Cash App business accounts may enable you to give your clients more payment alternatives without requiring a merchant account or an expensive payment processor. A Cash App business account is also ideal if your company specializes in low-volume online sales.

However, using Cash App instead of a more comprehensive choice for your company transactions may have the following drawbacks:

You cannot send or receive international transactions
Your business cannot use the Cash App Visa debit card or its ‘Boost’ discounts
Customer support is only available via email or social media
Square reserves the right to hold your funds or terminate your account if deemed necessary
You must provide every customer who purchases an item worth more than $15 a receipt.

Cash App Chargebacks

Chargebacks occur when customers or cardholders dispute transactions with your company. Chargebacks to your account are your responsibility, following Cash App’s chargeback resolution process.

If your consumer claims that they did not authorize a transaction, Cash App will reverse or charge the transaction amount to your business account. When you opt to utilize Cash App for your business transactions, you must agree with and accept their chargeback terms and conditions.

Cash App has the authority to debit your associated bank account to reclaim the money you owe. Cash App, for example, can delay your reimbursements if you have pending chargebacks. If you lose a chargeback dispute, you must pay the total amount plus any fees to Cash App. If you have too many chargebacks, Cash App will restrict your account.

Because chargebacks are time-sensitive and involve multiple parties, including your bank, customer’s bank, and card companies, the Cash App allows users to fight and correct chargebacks. As a result, you have the right to fight a chargeback if you believe it was unjustified.

Can You Send Invoices Through Cash App?

Sending invoices is not an option in the Cash App. On your phone’s screen, there is a “request” button that you can use to submit a payment request. The Cash App’s request button feature is the one that most closely resembles an invoice because it urges your client to pay you for your goods and services. Additionally, the Cash App keeps track of your payments, allowing you to review previous transactions whenever you need to.

Does Cash App let you Cash out from ATMs?

You can withdraw your money via an ATM if you request a debit card with your Cash App account. However, you may need to pay $2 per ATM withdrawal.

Is Cash App Secure?

Cash App complies with the PCI data security standard (PCI-DSS) Level 1, the highest level of security compliance for payment processors. As a customer, you don’t have to be concerned because Cash App encrypts and secures your data.

You can further increase account security by enabling two-factor authentication, creating a transfer pin, and turning on notifications to monitor account activity.

Can You Use Cash App for Your Business Transactions?

Due to constraints imposed by card issuers, their bank partners, or the law, Cash App cannot handle payments for certain types of enterprises or business activities.

Some of the firms that may be unable to use Cash App for business transactions include:

Buyers or membership clubs, including dues from these clubs
Credit counseling or credit repair agencies
Credit protection or identity theft protection services
Direct marketing or subscription-based services
Infomercial sales
Inbound or outbound telemarketers
Prepaid phone cards or phone services
Sales of foreign currency
Bill payment services
Agencies engaged in debt collection
High-risk products and services

Should You Use Cash App for Your Business Transactions

Cash App’s business applications are limited yet effective. Cash App may be an ideal payment alternative for your business if it conducts modest and infrequent transactions. However, you can accept Cash App and credit card purchases without trouble and hardware investment outside your mobile device. A flat 2.75 percent transaction charge harkens back to Square’s early days; without a flat markup, it’s easy to perform very few transactions economically.

However, the Cash App is relatively limited in that it only allows users to make and receive transfers. In addition, if your company’s headquarters is in Massachusetts, Maryland, Vermont, Illinois, or Washington, Cash App will send you a 1099K form if you make more than $20,000 transactions yearly or less.

Cash App Alternatives

If you are skeptical about using Cash App for your business transactions, there are several other alternatives that you can consider. They include:

Zelle

Small businesses can use Zelle to receive payments if their business bank accounts support the integration. You can send and receive money without worrying about transaction fees with Zelle. Another added benefit is that your funds will arrive in minutes, but Zelle doesn’t support international transactions, and you may need to calculate your taxable income.

PayPal

Even though PayPal payout timing can take longer than other payment processors, it allows small businesses to set up recurring payments. It offers highly beneficial invoicing features. PayPal’s transaction rates vary depending on the payment method, with a transaction fee of 3% + $0.49 for credit card payments.

Venmo

With a Venmo business account, customers can make payments with credit cards or through transfers. Business accounts must pay a transaction fee of 1.9% + $0.10. However, your customers won’t have to pay any fees to make payments to your Venmo account.

Conclusion

The volume of transactions you initiate daily, the type of business you operate, and the tools you require to manage your business will determine if the Cash App business account is the right fit. There is no limit to how much you can receive with a Cash App business account, and there is no fee for immediate deposits, which could benefit your business. There are several disadvantages to using Cash App business accounts, such as the 2.75 percent fee for credit card purchases and the 2.5 percent fee for debit card and Cash App transactions.

You must also provide customer receipts for transactions above $15, which might be difficult. Overall, before accepting Cash App as a payment method for your business, you should carefully examine the pros and cons. While it may be a terrific option for specific organizations, it may not be as beneficial to others.

Turbocharge Your eCommerce Store with These Growth Hacks [2023 Update]

More and more individuals have started their own businesses at breakneck speeds. eCommerce is one segment of the industry that has experienced tremendous growth over the past couple of years. After an increase of 50% last year, the United States eCommerce martket is worth more than 1 trillion dollars.

Of course, one of the biggest drivers of starting a business is the ease at which one can start. In the past, starting any business meant having to do the appropriate state-level registration filings, opening a bank account, procuring large scale technological infrastructure at huge costs, and then securing a merchant account via a lengthy and convoluted application process. This process served as a huge moat for wishful individuals looking to break into an most industries. Today cloud computing, software as a service (SaaS), and mobile technologies such as smartphones and tablets have greatly reduced these investment barriers and allowed businesses to form with minimal investments.

Furthermore, companies such as Host Merchant Services focuses on guiding merchants, including high risk merchants, to streamline the merchant account application process and advising businesses on how to quickly start accepting payments. This business formation process, particularly for eCommerce businesses, has been facilitated by specific platforms catering to them, including eBay, Shopify, Etsy, Amazon, to name a few.

Given these changing dynamics of quickly setting up a business to start accepting payments, coupled with the skyrocketing costs of rent of physical stores, result in eCommerce as a natural option for doing business. However, beyond simply doing business as an eCommerce merchant, there are ways to focus on growth to further expand your operations. In this article, we look at ways merchants can turbocharge their eCommerce store with significant growth hacks.

The Growth Hacks

Virtual and Augmented Reality

Over the past two years, consumer demand has shifted to online shopping experiences in lieu of in-store visits. As technology has facilitated contactless payments, the 3D virtual view of an entire designer showroom via investing in virtual and augmented reality allow consumers to experience full virtual rooms to “try” on outfits.

eCommerce businesses that invest in VR and AR technology will have a leg up on the competition allowing consumers a visualization of their product by trying on products via a hyper-realistic representation of a 3D fitting room. What AR and VR lets customers do is have a view of how certain apparel may look on them, within their space. Such capabilities can have tremendous benefits for merchants since, according to a survey conducted by UPS, 27% of all product returns were due to the product being “not as described.” According to ATLATL Software, a specialist of AR, VR and 3D software for eCommerce businesses, “two-thirds of shoppers say they have more confidence in their purchase as a result of the visuals rendered from AR and VR.”

Furthermore, according to research firm Statista, mobile commerce, the primary mode by which merchants implement AR and VR technology, is expected to surpass $430 billion annually in 2022. So, one of the best growth hacks eCommerce merchants can implement is to align their business to be an active participant in the mode of commerce that is likely to control a greater portion of consumer activity.

Finally, as large as eCommerce and mobile commerce are, online shopping still has many pitfalls. The online shopping cart abandonment rate is around 70%, according to research by Baymard Institute. However, the use of AR and VR increases conversion rates by 94% among merchants utilizing the technology.

Let Your Customers Know Their Payments are Secure

We’ve made great strides with the payment technology, with ecommerce first coming online with desktop, then mobile, and then via business’s own apps, along with consumer spending habits shifting to prefer eCommerce vs a traditional in-store shopping. As great as all these changes have been, they present their own set of challenges. Merchants are continuously faced with striking a balance between the customer experience and protecting those customers from security threats.

It’s hard to ignore these trends. Security experts are not ignoring them, and merchant services providers take these potential threats seriously. There are big expectations from merchants. According to the latest American Express Digital Payments Trendex Report, 90% of consumers already feel that their payment details are sufficiently secure given all the enhanced security protocol merchants implement. In fact, nearly 40% of shoppers feel that those protocols are making the checkout process cumbersome.

Nonetheless, the convenience of eCommerce and contactless payments not only pose threats, they’re resulting in real losses from nefarious activity. According to market research firm Statista, nearly 75% of all eCommerce merchants worldwide experienced some form of fraudulent activity in 2021, with total losses amounting to about $20 billion in total. As a result, the market for fraud prevention and security in eCommerce is expected to balloon to $70 billion by 2025.

There are specific actions merchants can take to inspire confidence in the security of their platform while also minimizing threats. According to the previous American Express report mentioned, more and more consumers are growing comfortable with the merchant saving their card information on their databases, a process called “card on file.” Today, 61% of consumers are comfortable sharing their payment information with the merchant to set up card on file. That is up from 43% in just two years.

With card on file merchants and consumers both save time and potential of error by eliminating data entry in every checkout. Furthermore, the payments can be processed via a secure tokenization mechanism. Tokenization does not use actual personal financial data but rather a meaningless set of characters generated in the form of a token which can be used to settle a transaction as the token will be accepted as a credible payment after it is deciphered by the token key at payment authentication.

Merchants should showcase this, and all other methods used in securing their payments, building confidence in their platform, which can also serve as a feedback loop for other customers to set up card on file with the merchant. Some ways merchants can accomplish this starts with their website landing page. Customer can see when a website is encrypted by a method called SSL, or Secure Socket Layer. SSL secures all financial information passing through various channels from the website when processing payments. Other ways to build trust around the security of a merchant’s platform is to showcase various trust badges on your website, such as a business which is ‘PayPal Verified’ or ‘Secured by Verisign,’ among many other options.

Urgency, FOMO, and Social Proof

A great way to increase sales in eCommerce is to implement certain initiatives that promote urgency among buyers, or some level of fear of missing out (FOMO). For consumers, FOMO can be instigated by marketing that appeals to their desire to clinch an opportunity before it’s too late and escapes them. Merchants will need to convince customers that time is of the essence, and there are hoards of peers vying for the same product, a concept known as social proof.

Social proof is one of the best influencers of consumer behavior. The book Influence by Robert Cialdini revolutionized persuasion and influence marketing with the concept that people look to others to decide what they themselves should do.

Sales, limited time offers, any promotions with the tagline ‘while supplies last’ are all a culmination of urgency, FOMO, and social proof. And it is in the best interest of all eCommerce merchants to employ all these psychological selling strategies.

Get Customer Testimonials

The best time for all eCommerce merchants to start building a portfolio of clients that can showcase their best features is as soon as they start their business. The second best time; right now. The aim should be to get other consumers to read about the benefits offered by your company.

There must be a plan for reaching out to customers and obtaining testimonials of your services. These efforts should include all platforms and major online review sites. You can have great copy and amazing graphics in your marketing, but customer testimonials of actual experiences using your goods or services will supersede that marketing any day.

Testimonials should be in the form of both text and video and should be available on your YouTube channel, Facebook page, Twitter feed, Instagram reels, Snap stories, Pinterest Pins, Google Reviews, as well as the Better Business Bureau.

Plan Your Campaigns

Maybe it’s the holiday season that draws the most buyers to your eCommerce site. Consider planning marketing campaigns using mailing lists and data on past purchases. Holidays are gold mines for merchants who plan accordingly well in advance. Consumers are happier, more altruistic, and open to spending.

These seasonal campaigns need not always be discount promotions. Customer enticement can even be built around specific level of gift wrapping and holiday packaging that businesses can begin to be associated their brands with – think of Tiffany’s blue boxes.

Target Your Audience

There are numerous examples of creating multiple audineces by segmenting the clientbase. Permutations that can be used to set up client segmentation include age cohorts, gender, marital status, family size, spending habits, lifestyle habits, income levels, educational levels, alma maters, geographic base, psychographic details, cultural roots, religious beliefs, sports affiliations, and many more.

The biggest benefit merchants get by segmenting clients is hyper-focus on specific preferences, and potential buying behaviors at different times of the year. This data can be utilized to target audiences with different emailing lists, discounts, or recommendations for certain products. This level of audience targeting can also allow merchants to offer extremely specific options which may feel they are tailored specifically for the individual.

Retailers such as TJ Maxx have historically employed a strategy to buy up inventory at a discounted rate for sports team jerseys and apparel only to offer them at full price once those teams start performing well. That strategy can be used to build out campaigns around performance of specific teams, targeting the fanbase of those teams.

Implement a Loyalty Program For Customers

Implementing a loyalty program is another great way for eCommerce merchants to turbocharge their growth. These programs are helpful not only in establishing loyalty among the client base but can also help quickly gain market share for new product lines.

Merchants haven’t been keen on implementing such programs, focusing solely on the commitment of both time and money that they require. However, this growth hack can be very effective and in helping accomplish other goals. The treasure trove of data that loyalty programs garner of merchants’ most steadfast customers allow businesses to quickly segment their clients, understand the profiles and preferences of this audience, and allow for effective targeting and outreach.

Among U.S. merchants, 75% reaped positive results by implementing a customer loyalty program, regardless of the investment of both human and financial capital to set up the program. Based on results from dual research conducted by Bain & Company and the Harvard Business School, client loyalty programs increase client retention by 5% and yield a 95% increase in profitability.

Human Resource Planning

All these hacks that we’ve listed so far are a great list of options for merchants to test, but they are not one man shows. Just as customers and marketing has to be segmented, so do your employees. Different groups of staff must focus on marketing, security, sales, and numerous other tasks, and they must do it effectively. Merchants need to consider specific strengths, skillsets, engagements levels, and motivations of their team members.

According to research by Gallup, employees who are engaged have a 41% lesser rate of absenteeism and exhibit an increased rate of productivity by 17%. According to research from the Glassdoor Economic Research unit, there is a correlation between customer and employee satisfaction. An increase of 1.3 points in customer satisfaction can be attributed to a 1 point increase in the company rating on Glassdoor’s website.

Expand Payment Options

Consumer shopping habits have shifted towards online, while eCommerce and mobile commerce, mCommerce, have flourished. Furthermore, newer options for payments have become available as demographic trends have also shifted towards contactless and digital. At the peak of the recent market cycle, the most valuable VC-backed firm was a FinTech company, valued at $95 billion. Shoppers prefer to pay via a digital wallet or other payments apps in lieu of a credit cards.

It significantly benefits merchants to start accepting payment methods preferred by consumers. That may include processing payments which include options such as P2P platforms such as PayPal and CashApp, or mobile wallets such as Apple Pay, Google Pay, or Samsung Pay.

Invest in all The Right Tools

Yes, investing in your employees, securing payments, setting up loyalty programs, planning campaigns, segmenting clientele, propagating urgency, using cutting edge technology such as VR and AR, and expanding payment options are all great hacks. However, having the right tools at your disposal can make life a lot easier and enable your employees to be much more productive.

Meta and Snap have long touted their hardware products for VR and AR. Netflix has gone to Microsoft to seek their help in implementing an advertising campaign and platform. All the major card networks such as Visa and Mastercard have their iterations of the 3D Secure payment security mechanism. There is a plethora of options for appropriate tools for human resource management, marketing campaigns and instigating FOMO, and at Host Merchant Services, we have robust options to help merchants expand their payment options.

Conclusion

eCommerce has grown by leaps and bound over the past decade. Just in 2021, the business segment was up by nearly 50% and in 2022, the industry will surpass $1 trillion in sales revenue, ahead of some initial projections by two years. Declining tech stack costs, improving internet and payments technologies, and the budding of numerous eCommerce platforms, and a natural demographic shift to shop online have all served as tremendous tailwinds for the industry.

Most people understand that eCommerce can sometimes be complicated. However, as with most entrepreneurial endeavors, optimal results from the above mentioned growth hacks will require a certain degree of experimentation. Some may not render many results, other may not work out for your specific industry or business. However, after experiemeting, you will find certain methods an absolute must to propel your business forward.

There are many challenges that still remain which merchants often need to confront in order to power through a growth phase. Areas such as the eCommerce checkout, vigilance towards security concerns arising from changing payments and technology infrastructure, embedded payments, marketing initiatives, employee training, and customer loyalty, all demand a business owner’s attention. As a result, merchants will have to invest both time and resources to continuously improve their processes to address these individual areas. If given the right attention, these initiatives can serve as incredible growth hacks to turbocharge your eCommerce storefront.

Best Strategies to Improve Cash Flow for Your Business

If you run a business and your sales and profits are improving every year, it’s clear that you’re doing something right. However, you should remain alert because even big and lucrative organizations might face cash flow issues if their finance processes are inefficient.

The foundation of your business is cash flow. While a negative cash flow is bad news for businesses, a positive cash flow indicates that you could build and run a successful firm. You can put some of the suggestions in this article into practice whether you’re having trouble with negative cash flow or are attempting to boost your positive cash flow to get your business where it needs to be.

Consider Leasing

As leasing equipment, materials, and rental properties is often more expensive than buying, focusing only on your net income after expenses may seem paradoxical. However, unless your company is overflowing with cash, you’ll need to keep a steady cash flow for day-to-day operations. Furthermore, you can pay in smaller amounts by leasing rather than purchasing, which helps your overall cash flow. Another advantage is that leasing payments are deductible as a business expense when filing your taxes.

Send Invoices to Your Customers Immediately

Sales and invoices are the lifeblood of your company, and you can’t get paid (make sales) if you don’t submit invoices to your clients. Therefore, it is essential for you to track and maintain the billing of your customers because the faster you send an invoice, the quicker you’ll get paid, which will boost your company’s cash flow. Consider migrating to cloud-based accounting software with appealing and simple-to-create invoices if your present invoicing procedure is stressful.

Improve Your Inventory

If your company sells products, make a list of the fast and slow-moving items. The second thing you want to do is stock more of the items that sell quickly and less of the items that don’t, as the latter tie up your cash and have an adverse effect on your cash flow. You don’t want your money to be tied up in a single product while running a stock-handling business; instead, you want to be able to sell more products quickly, which will increase your company’s long-term scalability. You can decide to sell them off at a discount if you have many products tying up your money. Although it may be challenging to give up on a product you firmly believe in, it’s essential for the sustainability of your company that you stay objective and unsentimental.

Get Your Customers to Make Invoice Payments on Time

Another strategy to enhance your cash flow is encouraging your clients to pay on time. Here are some strategies you can employ to ensure your money is not held up in debt by your customers:

Follow-up

Your consumers may forget to pay you from time to time, so you may need to remind them. Sending an email a few days before the scheduled payment date, on the day the payment is due, and/or a few days after the payment deadline is a good idea. You can also call them and continue sending emails to remind them if they don’t make payments or answer your follow-up emails. You don’t need to manually send these reminders when using accounting or invoicing software because the system will do it for you when a customer is past due on their payments.

Offer incentive

Another strategy to encourage your customers to pay their invoices on time is to provide discounts to consumers who pay within a specific time range. If your billing terms require clients to pay within 20 days after receiving your invoice, and you wish to obtain payments sooner, you can adjust the terms to a shorter time frame or give incentives.

Consider late payment fees.

You might also include late payment charges in your invoice payment policy. To accomplish this, set a regular time for your invoices to be paid and keep to it. Having a policy for late payments will assist you in receiving your money when it is due while distinguishing you as an expert in your industry. To avoid confusion and maintain transparency with your consumers, ensure you are upfront about how much you will charge and when you will begin charging them. You should also research how much you can charge for a late payment fee, as this varies by state and sector.

Invoice factoring

If the tactics above aren’t successful, you can seek invoice factoring. Invoice factoring can be a great option if you’re experiencing cash flow problems due to unpaid invoices. You can trade your outstanding bills to a factoring organization in return for instant cash via invoice factoring. Even though the organization gets a small percentage of your earnings, the good news is that you won’t be trapped waiting for payments from late payers.

Perform Credit Checks on Customers

If a client does not wish to pay you in cash, conduct credit checks to confirm that the customer is creditworthy. It is likely that a customer with bad credit will not pay on time. Even if you strongly want to make the deal, remember that doing so would affect your company’s cash flow. If you decide to sell to such a customer, make sure to charge a high-interest rate.

Increase Your Prices

Consider increasing the price of your goods and services if you’re having trouble managing your cash flow. You should keep an eye on what your competitors are charging, consider any increases in the cost of the equipment you use for your operations, assess how many people you need for your inventory assembly and services, and make the required adjustments.

Maintaining competitive prices while ensuring that you and your staff are fairly compensated for your efforts is a tricky balance. If your rates are too low, you can be undervaluing your firm because sometimes lower pricing can give the impression that it is less qualified. Because you want to create sales, but you also want to turn a profit at the end of the day.

Even if you still want to maintain competitive prices, you must raise your rates when necessary in order to boost your cash flow and expand your business. It is important to continue monitoring market developments and adjusting your rates as necessary, even if you now think your pricing is appropriate. Failure to make changes could be terrible for your company and significantly impact your cash flow.

Use Electronic Payment

If you pay electronically, you can put off making payments until the morning of the due date. This buying period benefits your financial flow. Furthermore, if you use a business credit card to make payments, some provide a grace period of up to 21 days, which can help you enhance your cash flow and even gain cash back rewards. However, avoid piling up debt and pay as soon as feasible.

Expand Your Sales Market

Finding a new revenue stream for your company is another tactic that can help boost your cash flow. Here are some suggestions to start moving in the right direction for your business:

Offer new goods or services

Consider the goods or services your company already offers, then brainstorm other products you could offer. Here, you have room to be inventive and think beyond the box. Additionally, you want to pick a service or product that will sell well and work well with your current products.

For instance, if you own a coffee shop, you may start selling lemonade in the summertime. Likewise, if you run an event planning company, you might provide cleaning services as a part of your services. You might even consider renting out your business’s spacious outside area for events and parties on weekends or when you are not using it.

Develop a fresh marketing strategy

You might want to adjust your marketing plan if you don’t wish to provide new goods or services. Consider new strategies for marketing your company, and if there are any demographics you haven’t been focusing on that might profit from your goods and services, start focusing on them. You can significantly improve your company’s cash flow by acquiring new clients.

Encourage your customers to make additional purchases.

You can increase your cash flow by getting your current customers to make additional purchases. Offering product bundles, where you sell related things together to stimulate increased spending, is one way to accomplish this. Additionally, you could promote goods that fit your clients’ needs. For instance, if you use an online marketplace, you might promote additional products the customer might find exciting or products that other customers have bought. If you don’t want to sell a brand-new product, this tactic can help you increase sales and cash flow.

Review The Operating Costs for Your Company.

Increasing the amount of money coming into your company is only one aspect of managing cash flow. You must cut back on the expenses your company incurs. Here are some pointers to assist you in reducing business costs and managing cash flow:

Limit unnecessary spending

When you examine your company’s cash flow and analyze your spending, ask yourself whether the money spent on your expenses was essential, if so, how crucial they are and whether there might be a less expensive alternative.

Consider your responses to these questions and, if you can, strive to reduce your spending or eliminate any unnecessary expenses. Managing your cash flow and expenses may seem difficult initially, but you and your company will feel better if you do it.

Buy more efficient equipment.

Investing in better and more sophisticated technology and equipment is one way to boost your business’s speed and efficiency. The equipment may be pricey, but it will save time and allow you to spend less on wages. Investing in more efficient equipment will boost your company’s productivity, resulting in more sales and better cash flow.

Talk to Your Vendors and Suppliers

Your firm needs to purchase goods and materials, but you also need to consider whether you are overspending on them. Negotiating a bargain with your vendors and suppliers or, if necessary, looking around for other possibilities can help you reduce expenses and improve your cash flow. Consider the following tips:

Request for bulk inventory rates

If you buy things in bulk, some vendors, especially those with whom you have a solid working relationship, might be more than happy to give you discounts. Don’t overlook talking to your vendors about this possibility since it can be beneficial.

Negotiate better credit terms and prices

Try requesting discounts from your suppliers and vendors if you have a long-standing relationship with them. You might also get other reductions, better prices, and conditions in addition to bulk inventory rates.

Look for other options.

In some circumstances, if your existing provider is unwilling to renegotiate terms and pricing, it might be preferable to explore better possibilities from other vendors and suppliers. Look for a provider who will sell you goods at the required price and conditions.

Take Out a Small Business Loan

A short-term loan is another option to improve your cash flow. A lender provides you money as part of a short-term loan, which you must repay in several installments over a limited time. The lender also authorizes you to withdraw up to that amount of money whenever you need it, and you are only required to make payments on the amount you spent.

If you find it difficult to borrow money, you might want to think about getting a cash flow loan for the following reasons:

Purchasing stock
Take on a lucrative new venture
Get new machinery
Grow your company

A cash flow loan may be the perfect solution if you’re having trouble with cash flow.

Open a Business Savings Account

Consider opening a business savings account to earn interest on your money if you don’t already have one. This tactic is a straightforward and efficient way to make some money and a great technique to guarantee that your company always has a cash flow cushion. Additionally, make sure to deposit your funds in a high-yield savings account so you may earn additional interest. The best high-yield savings accounts provide interest rates more than 17 times the national average, allowing you to make more money from your savings.

Consider a Business Credit Card With Cash Back Rewards.

A cash-back business credit card may be wise to make money off your expenditures. A cash-back credit card is a simple way to gain money if you use it responsibly and can afford the monthly payments.

Pay Your Merchants and Suppliers at the Right Time.

Think carefully about when to pay your suppliers and merchants. Make sure to pay before the due date if your vendor gives discounts for early payments so you can save some money. If the vendor doesn’t provide discounts for early payments, pay when it is most convenient for your company. For instance, let’s say your payment is due on February 2nd. But, you know that February brings in more business than January does for your company. To report positive cash flow in January, pay your bill on the final day it is due. Nevertheless, you may want to use your company credit card if you require additional time to pay your payments. In this manner, you can gradually pay your bills instead of everything at once.

Conclusion

The outcome of efficient and effective operations is a healthy cash flow. By tracking your cash flow and taking steps to improve and maintain it, you’ll be on track to running a successful business. Even though you can increase your company’s cash flow by putting some of the above strategies into practice, you also need to ensure that you’re choosing the best course of action for your company in terms of marketing, customer service, product, or service development and acquiring new clients. Regularly reviewing and updating your business plan will ensure that you anticipate trends and challenges before they affect your profitability.

Top Payments Industry Trends 2022

Many quickly recognize that the payments industry had an exceptional decade and a half, often citing how innovative and exciting the industry has been during that time. However, a closer analysis will easily showcase that innovation is a part of the payments industry’s DNA. Going back to the late 1940s, the introduction of the first credit card led to subsequent iterations offering new conveniences to consumers worldwide. Individuals today cannot be bothered by carrying cash. Now, a person simply swipes a phone next to another machine, and viola, a payment has been made.

Now the payments industry is on the cusp of the next iterative era. We have different technologies. Societies at large are shifting away from cash. In fact, everything seems to be moving towards a single device, the smartphone. These tiny devices pack the power to put someone on the moon into your pocket. Simultaneously, the economy has been in an expansionary phase for well over two years, with consumers looking to spend, confident from the ensuing wealth effect. As a result, money has flowed freely into the payments industry driving tremendous change by entrants equipped with technological prowess, spawning a new industry; FinTech.

In this article, we explore the rapidly developing payment industry trends of 2022 that are likely to shape consumer behaviors for decades to come.

Further adoption of digital payments

Another trend that will likely continue in 2022 for the payments industry is the ongoing adoption of digital payments or cashless transactions. Consumers had been slowly shifting away from cash for some time. Block, formerly known as Square, PayPal, and Venmo, all addressed specific pain points allowing the smallest of transactions to be processed via non-cash means.

Just as these innovations were becoming mainstream, smartphones were also becoming ubiquitous and more powerful. Companies had started to take advantage of technologies such as near field communication (NFC) and tokenization that now allowed for the safe storage of financial details. Merchants had also started upgrading their systems with the pertinent point of sale terminals equipped to handle NFC payments.

Then, to command more consumer attention, companies traditionally classified as technology started encroaching on the payments industry. Apple, Samsung, and other major tech companies began developing digital wallets that customers can use to make payments. Then in 2015, Google announced that it had hired Ruth Porat, a finance industry veteran, as the company’s next CFO. Universities began to notice a growing trend among MBAs to work for tech companies rather than Wall Street.

Consumers’ preference to not use cash is the payment industry’s supply-side economics. The majority of Generation X, 56%, would rather shop online than go into a mall. That percentage goes to two-thirds when looking at just the Gen Z demographic. Overall, more than 80% of the 25-44 age cohort prefer NOT to use cash. Of course, the last couple of years forced people to shop online rather than go out. Once individuals were introduced to the convenience and ease with which they could shop online without cash, it had a lasting impact on their shopping habits. After growing 50% to $870 billion in 2021, eCommerce is expected cross $1 trillion this year.

Buy Now Pay Later

Although the air has come out of some of the most highly inflated valuations of buy now pay later (BNPL) companies, the payment trend is increasingly gaining traction among customers. The drop in values is motivated by both headwinds experienced by the overall market and increased competition in which retailers and strategies by companies that aim to start offering their BNPL solutions and cut out the middleman.

BNPL is precisely what the name suggests. Customers can buy a product now and pay up later. A third party, such as Klarna, serves as an intermediary between the buyer and the seller, offering the financing to the customer, paying for the product thoroughly to the manufacturer, and usually extracting a small discount on those products. This trend has been a win-win-win. Companies like Apple and other major businesses experience increased sales while allowing consumers of all types to facilitate purchases they may not have otherwise been able to make. Meanwhile, an entirely new subsection in the payments industry has been launched.

But there are risks. Many industry watchers point to the dark connotations of BNPL solutions. Many may equate it to a less exploitive pay-day loan industry of the digital era. Also, there has been limited oversight of the industry. Although BNPL allows consumers to punch above their weight class by letting them make purchases they would otherwise may unable to afford, those sounding alarm bells warn of individuals being put in debt traps without any traditional guardrails. There is no reporting of BNPL transactions, so creditors cannot effectively foresee the liquidity clouds that are gathering for households.

For BNPL, 2022 may be the year where there is a fundamental change in regulation. Consumer Financial Protection Bureau may start mandating centralized reporting of BNPL transactions like other credit transactions to the credit bureaus.

The payment industry heavyweight incumbents are looking to expand their product offerings to include BNPL. Last Year, Block paid $29 billion for Australian BNPL solutions provider Afterpay. A few months later, PayPal bought the Japanese firm Paidy for $2.7 billion. This year, Apple announced its own BNPL service through Apple Pay. With all these dynamics in play for the payments industry, BNPL is expected to continue to thrive in 2022.

Integrated Payments will be the game changer in Customer Experience

The customer experience will be the biggest game-changer. Apart from technology, the most significant trend percolating organically within the payments industry is the focus on the customer. That has led to the survival and growth of companies that have shunned long wait times, sordid sales practices, and convoluted legalese in their terms and conditions.

Social media and online reviews have been responsible for this phenomenon. However, the technology companies have not modeled this customer-centric behavior. As a result, existing tech giants or even new startups looking to leverage their tech expertise that foray into payments this year must have the customer front and center.

Language preferences will need to be considered. That means that payment methods accepted by merchants must conform to how customers want to pay, not vice versa. As a result, payments will begin to start integrating into SaaS environments. So the likes of Salesforce.com and Automattic, which have large customer platforms offer integrated payments, leveraging their existing trust with customers to easily showcase the convenience of that process. Payment settlement without having to leave that SaaS environment after entering your payment credentials once is agnostic of the payment type, whether that’s a card, a digital wallet, a P2P account, or any of the numerous mobile wallets.

Banks will also leverage this trend to offer their version of a one-stop shop for account management of cash, any number of cards, possibly even cryptocurrencies, while providing financing, insurance, forex, or trade financing through their app. Every company, whether JPMorgan or Adobe, will look to embed payments to offer a holistic customer experience.

The Super App

There is a more significant reason for companies trying to embed payments into their environments. It is the same reason that the likes of Apple, Google, and other tech companies have a great interest in the payments industry. It is a race for platform supremacy. These companies want to be the first to become a Super App in a region.

A super app is an app that combines the most commonly used functions of a smartphone into one app. To become a super app usually requires three main parts, social media, shopping, and payments. Once these three main common uses are combined, super apps become a self-sustained and self-contained ecosystem that guarantees an indisputable level of eyeballs that the super app can control at will.

There are already examples of Super apps outside of the US. Tencent’s Wechat app in China commands over 1 billion users [MF1] . Another example is Singapore-based Grab. The company used to be a ride-hailing app and then evolved into offering other services and becoming Southeast Asia’s juggernaut Super app.

The Super app decides the best vendor for any tertiary service customers need. The super app decides which is better for the consumer: Uber or Lyft, DoorDash or GrubHub, UPS or FedEx, Walmart or Amazon. So, one of the best chances one has to ensure their app doesn’t get voted out by the kingmaker is to become the kingmaker yourself quickly. That’s why Facebook wanted to launch a digital currency [MF2] . Shopify has its own Payment solution. As do HubSpot and Salesforce.com . Even Adobe has an integrated payments system.

Apple, PayPal, and Block already have many pieces of the puzzle. PayPal has payments processing, a peer-to-peer payments app (Venmo), and has now entered the foray of BNPL with the acquisition of Paidy. Block is similar. The company processes payments and lets customers trade cryptocurrencies, has a P2P payments app called CashApp, and has also waded into BNPL with its purchase of Afterpay. Apple has the iPhone that controls the app store ecosystem, thereby the eyeballs of the billion most influential people in the world with significant discretionary incomes. The company has Apple Pay and just launched its own BNPL solution.

All these three companies now need the social media peg of the Super App stool to become a lifestyle mainstay. Jack Dorsey, the co-founder of Block, is also the co-founder of Twitter. Some have contemplated [MF3] he should turn these step-children companies into conjoining twins. Also, PayPal was rumored to be buying Pinterest [MF4] late last year.

To become a super app in China or other parts of Asia or Europe would be great. But the ultimate prize is to do it in the US, the largest economy in the world. Becoming a super app here would be the equivalent of the next trillion dollars in market capitalization unlock for that company. 2022 will be the year in which these payment industry heavyweights, which are so very close to that unlock, will look to cement super app status.

Real-time payments

Speed of payment processing and completing a transaction has been at the forefront for several years now. We started to shorten the time of peer-to-peer transactions within specific platforms such as Venmo and Cash App to almost real-time. Even time for retail payment processing has improved to next-day funding and, very recently, same-day financing. These are indeed exceptions at present, and the rule is still payments take almost three days to settle and have payments received by the merchant.

The good thing is that real time payments have become the norm rather than the exception and seem to be on the horizon. The technology behind real time payments has been in place for 50 years. It is already implemented in many parts outside of the US. In 2019, the Federal Reserve launched an initiative called FedNow. The program will let merchants, consumers, and financial institutions carry out business as usual. The backend rails work in tandem to share payment details, authenticate them, and settle payments in real-time. FedNow will be available around the clock, every day of the year.

The benefits of real-time are clear. The lines between cash and cashless transactions blur while eliminating cash handling headaches for both merchants and consumers, especially since the system is always available. But there are risks that will need to be considered and mitigated. We already hear of the swath of the population that is unbanked. By inviting technology into payments, those problems may be exacerbated. Also, the costs associated with implementing this infrastructure for financial intermediaries are unclear. As a result, it may be unclear how the adoption of FedNow may be impacted.

FedNow is expected to be fully operational in 2023, and over 200 financial institutions are currently working with the Federal Reserve on the project.

Security

Security sounds like one thing that tops the list of trends every year. Each year brings an additional set of new trends and challenges, risks, and at least one major security scare that keeps everyone at the edge of their seats. 2022 was ushered in with a warning by the US President to beware of Russian cyberattacks in response to economic sanctions levied on the country by the international community, led by the US. Cyberthreats emanating from Russia is not new. The government has for years engaged in cyber attacks on Ukraine. The country is believed to be behind the 2020 SolarWinds hack, which, over several months, compromised sensitive data of significant firms worldwide as well as the largest government agencies, including the US Department of Homeland Security and the US Treasury Department.

Cyber espionage at a sovereign level is not the only threat. Year after Year, major business and technology titans report of security lapses compromising data impact millions, if not billions, or personal records. In 2021, Facebook reported a data breach affecting 533 million people [MF5] worldwide. The year before that, the world learned that Microsoft had accidentally leaked the company’s customers’ online records of more than 250 million. In 2019, the 11th largest bank in the US by asset size at the time, Capital One Financial, disclosed that the company experienced a data breach in which over 100 million customers’ personal account information was hacked.

Some of the largest, most technologically advanced companies and government agencies succumb to often small-time nefarious actors who identify and exploit obscure technology loopholes. As a result of these ongoing and persistent threats, security remains at the top of mind for governments, businesses, and consumers alike. This is even more pronounced as the payments industry wades into technologies and trends still in their infancy, such as cryptocurrencies, mobile wallets and payments, and mass adoption of cashless transactions.

The payments industry has been fashioned by decades of innovations. The trends that brought the industry to this juncture are likely to continue at an exponential rate. Society adopts digital payments at an accelerated pace, and merchants continue to adjust their business models to these changing dynamics. You wouldn’t be wrong if you believed the spending habits of consumers had changed dramatically. The truth is that consumers’ living habits have changed. Both living habits and working patterns have converged into a single device. Technology has propagated that, and the resulting payment advancements have further facilitated it. The payments industry in 2022 will further cement trends that have been developing over the past decade and have started to really flourish in the past couple of years. However, companies must remember that feedback from the consumer will be vital to their success. Those consumers will form the trends, so market research seeking their feedback will be critical.

[MF1]https://en.wikipedia.org/wiki/WeChat

[MF2]https://www.ft.com/content/cfe4ca11-139a-4d4e-8a65-b3be3a0166be

[MF3]https://www.economist.com/business/2021/03/13/should-jack-dorsey-combine-twitter-and-square

[MF4]https://www.bloomberg.com/news/articles/2021-10-20/paypal-said-to-explore-purchase-of-social-media-firm-pinterest

[MF5]https://about.fb.com/news/2021/04/facts-on-news-reports-about-facebook-data/

Top ERP Trends to Watch in 2023

An ERP is the backbone of business operations. It helps with every function you can think of; Operations, Sales, Customer Support, Marketing, and internal supporting teams such as HR, Legal, and IT. If you’re using an ERP such as the one offered by NetSuite, even the Finance department can be integrated into a single environment.

The type of ERP a business uses is mainly determined by the size of the business, what industry the company operates in, and the future strategy and goals; is the business planning to grow further or is already at a specific sweet spot? However, there are certain functionalities that enterprises must focus on that are absolute for an effective ERP deployment. These include whether the ERP is cloud-based, whether it has a mobile application, what different teams the ERP can serve well, or how much integration an ERP can facilitate.

Often businesses deploy an ERP in segments, some core departments are onboarded first, and the rest follow. That can also impact the type of ERP a company chooses to use. Below we look at an ERP, its many benefits, and the top ERP trends to watch for in 2023. We highlight what is essential for businesses and the latest cutting-edge ERP product offering that various solutions providers are at the forefront of.

What is an ERP?

ERP, also known as Enterprise Resource Planning, has its root in supply chain management systems used by manufacturers called Materials Requirements Planning (MRP). MRPs are mainly used to plan around inventories efficiently and manage production based on supply and demand. Similarly, an ERP helps companies manage financial resources where businesses record transactions and accounting entries in the general ledger and oversee accounts receivables, payables, and payroll. An ERP also has a robust financial reporting functionality offering rich insight into specific operations and the overall health of a company.

The ERP Trends to Watch in 2023

The Cloud and Hybrid Deployment Model

With over 20 years of companies offering cloud-based services or ERP solutions, it’s hard to imagine that not all ERPs today aren’t cloud-based. Chief Technology Officers worldwide say that over 50% of all IT spending this year will be on cloud computing. So that means that some portion of the nearly 50% that isn’t cloud-related will go towards traditional IT spending, such as servers and on-premise data centers. These house on-premise software deployments, including ERPs.

There have been legitimate reasons for businesses not to shift to the cloud, including security, resiliency, and whether data storage on the cloud is hosted in another country.

However, on-premises ERPs carry their own set of risks. How much and for how long do security and Support exist or legacy operating systems running these ERP systems? Can they find staff to manage these systems easily, and do the costs of doing so outweigh the cost of migrating to the cloud?

In a nutshell, businesses are still in the midst of a transition to the cloud. However, the shift has accelerated. Work dynamics are changing as more employees work from home, making ERPs that aren’t on a cloud riskier and untenable.

That’s not to say that the on-premises deployment model will completely disappear. A hybrid approach still makes sense for many businesses. Resiliency is a big concern as service outages by cloud service providers, however brief, can wreak havoc on businesses.

Mobile

Mobile was once viewed as a tertiary feature that was more gimmicky than nice to have. Over time, it started to become a value add. Today, given the changes in how we work and the advancements in mobile devices such as tablets, mobile is becoming the de-facto standard. As employees work from anywhere and work shifts to the cloud, a mobile iteration of an ERP is an absolute must from any service provider.

The mobile version of an ERP offers tremendous productivity by allowing customers to access it from anywhere at any time. Second, besides the user interface, the underlying technology isn’t that different from the regular version of the ERP since they’re both cloud-based.

Furthermore, a mobile ERP may be better than a traditional ERP as it allows customers to quickly capture and upload receipts or other transactions that need to be recorded in real-time. This goes beyond productivity and more into the realm of user adoption and compliance with timely expense report filings.

Finally, we’re all well aware of one of the best benefits of ERP, enhanced decision-making based on all the data gathered and easily and intuitively presented. As customers are further inclined to adopt the usage of an ERP motivated by the real-time benefits of mobile functionality, businesses will also see improvements based on quicker data capture and resulting analytics and reporting.

Artificial Intelligence

No product escapes the mention of Artificial Intelligence (AI) or similar terms such as Machine Learning (ML), Robotic Process Automation (RPA, and the like. And an ERP is no exception. No, AI won’t be taking over human tasks entirely in 2023, but it is viewed as a tool to drive productivity by automating the more mundane and repetitive tasks of customers.

Recurring deprecation expenses for assets can be recorded automatically based on their specific duration. Transactions can be automatically recorded in the applicable expense accounts based on precedents. Also, the ERP can execute relevant alerts and reminders for tasks such as asset revaluations, and receivables follow-ups, among others.

Furthermore, as more businesses use a subscription-based revenue model, they can automatically send periodic invoices for that subscription fee, record the transaction and process the payment without human interaction.

Increasingly, AI is used to identify internal audit red flags, client credit risks, and product sales recommendations based on customer personas and use cases. We predict that ERPs will leverage AI to streamline the customer experience further. Upon closing a sale, AI will allow businesses to generate invoices, onboard customers autonomously, and even recommend renewal price increases based on relevant factors.

The adoption of AI in ERP offers unprecedented efficiency by delivering automation, interactive advisory-type reviews, eliminating mundane and repetitive tasks, and reducing mistakes.

A blurring of the lines between ERP and CRM

In a way, you can call it the flywheel effect. Businesses have been successful with ERPs and CRM, Customer Relationship Management, software for over two decades. CRM was the first cloud-based business targeting companies with a new way of connecting and collaborating internally and introducing an entirely new paradigm on the customer experience.

Salesforce.com improved how companies supported, marketed, sold to, and conducted email campaigns outreaches to customers. The use of CRMs allowed all these functions to leverage data by setting up a single repository of all forms of interactions with existing and potential customers.

The data allowed companies to recalibrate messaging in a very targeted manner. Today, there isn’t only a sales or marketing team or a customer service team. Now, we have an exact science devised around the client: Customer Experience. As businesses captured the best practices for marketing to customers, sales processes, onboarding, and continuous hand-holding after the close via Support, they decided to codify these processes into an entirely new business practice, known as the customer lifecycle. Today, Sales, Support, Customer Success, and Account Management teams are all integrated and easily able to collaborate with one another.

Will all the intelligence available from a CRM, it is surprising that such systems are still a world apart from the ERPs used at firms. Shouldn’t the high-touch nature of a client, as evidenced by the CRM, factor into the contribution margins? Can the ERP calculating those margins easily capture that data for a CRM?

Companies like NetSuite have started offering unified solutions for both CRM and ERP. It is the logical next step to leverage the combined data sets of both systems. With an integrated offering, businesses can target customers based on specific financial benchmarks. Although businesses may already be able to see the total contract values of their customers or have a good gauge on the customer’s lifetime value. However, can companies easily calculate and access gross margins for each client using disparate ERP and CRM functions?

Shorter-Term Contracts

The subscription revenue model has become omnipresent in the business community in the last fifteen years. Companies in numerous industries have widely adopted this business model. There is a subscription offering for shaving razors and luxury watch rentals – so it’s not just applicable to SaaS businesses. Similar to the subscription model, the ensuing dynamic will be shorter-term contracts. Nothing delineates pricing models like a challenging economic environment. It is much harder for businesses to stop paying for a $2,000 monthly enterprise license than to cancel a $25,000 annual subscription.

With the annual subscription model, customers are locked into longer cycles when they may need certain tools for specific projects. A common question customers ask during an economic downturn is if the company has a monthly payment option for their product or service. Even in the event that the business intends to renew services for the entire year, the shorter-term contract offers customers the flexibility to manage their liquidity in uncertain times.

There is some silver lining to these changes. For all the benefits of shorter-term contracts, customers are willing to pay more for the product. Annual contracts can require a hefty upfront cost that requires shorter-term payments. Customers are willing to pay for the agility and flexibility offered by short-term contracts. Furthermore, shorter-term contracts are a great way to showcase all the use cases and benefits of an ERP or any other product. It is an excellent way for companies to get their foot in the door and let the service level win customers over and limit churn.

Integrated Payments

ERPs with integrated payments systems allow customers to check out quickly and process payments that are already on file, securely stored on the ERP. There are multiple benefits to this feature. First, it speeds up the checkout process. The decreased friction in the sales cycle translates into a higher likelihood of closing the transaction. Second, all this manifests into better cash flows for merchants.

Finally, integrated payments can allow merchants to offer customers to pay online and pick up their merchandise from their store locations. Host Merchant Services has a long history of partnering with NetSuite as a third-party payment processing ERP’s API tool CyberSource. HMS easily connects to the integrated platform and manages the end-to-end payment lifecycle, starting from the invoicing process all the way through to payments and reconciliation.

Blockchain

Blockchain has been all the rage lately and is repeatedly touted as the next technology breakthrough that will have a lasting impact on businesses and consumers. Blockchain is distributed and immutable ledger that records transactions and the tracking of both tangible and intangible assets of both companies and individuals.

Blockchain has remarkable potential because it can provide instant access to members of a network permissioned to access all data on the distributed ledger. The blockchain allows customers to access orders placed, payments made, production, inventory, sales, and every other business function, in real-time.

There are practical applications of blockchain for an ERP. For example, Walmart is looking to implement invoice recording, payments, and dispute resolution via the blockchain. Their existing supply chain is already being recorded on the blockchain by linking their delivery fleet’s GPS data to their incoming freight.

Invoicing is another segment of their operation that companies will shift to the blockchain over time. So if there is a dispute related to invoices or the quality of goods received, the blockchain offers immediate insight by accessing the entire digital trail. Still, it can also diagnose the root cause of substandard quality by pinpointing specific production centers. All functions offered by an ERP can easily be shifted onto the blockchain. So, it won’t be long before an ERP is provided solely on the distributed ledger.

Security

There have been a lot of concerns around security, especially for businesses with all the personal and financial data they can access. Plus, the security threats wreak the most havoc with data being compromised, leading to considerable damages resulting from a loss of trust, reputational damage, and most likely lawsuits. One of the best ways for businesses to prepare is to have an ERP with a full scope of security protocols in compliance with the most stringent industry standards.

These standards are a perfect way for merchants to build loyalty among their customers. Numerous brands have clients willing to share their payment details with the likes of Amazon and Apple, given the strong security settings and the use of tokenization to process their transactions, usually in a single click. Customers seldom ever have to reenter their payment information after doing it the first time. It becomes a virtuous loop; customers enter their payment once and never have to do it again. Since they never have to enter their payment details at a particular platform or merchant, they consistently choose to shop on that merchant’s site. This phenomenon of customer loyalty has been greatly documented in a Wharton study on Amazon’s one-click patent and business process[MF1] .

There are numerous SaaS offerings, such as the NetSuite ERP, which is cloud-based and has all the latest security settings, patches, and updates fully implemented and continuously updated as new releases are made automatically. Since the NetSuite ERP also offers integrated payments solutions, the latest payment security standards comply with PCI DSS (Payment Card Industry Data Security Standard). These standards include the Card Code Verification (CVV2), and Address Verification Service (AVS), among many others.

There are many great features that an ERP now offers. It can significantly enhance collaboration and efficiency in businesses that use ERP. Numerous vendors, such as NetSuite, understand the far-reaching impacts robust security protocols have on finance functions and operations. These measures can also enhance customer experience by offering an integrated payments solution.

An ERP is not suitable for all businesses. Even businesses that do deploy an ERP have different needs and use cases that drive their decision-making. The past few years have been essential for merchants as more have started businesses in industries where an ERP can offer tremendous benefits. Furthermore, ERPs themselves have implemented many features and functionalities that are increasingly useful to businesses, including cloud-based SaaS offerings, mobile functionalities, and integrated tools for multiple teams such as Sales, Support, and Marketing to enable enhanced collaboration. As businesses consider their needs for ERPs, it is vital to keep a watchful eye on all the latest trends of 2023.

[MF1]https://knowledge.wharton.upenn.edu/article/amazons-1-click-goes-off-patent/

Essential Tips for Reducing Restaurant Payment Fraud

The past several years have been a complete paradigm shift for the restaurant industry. Although noncash payments were always a norm among restaurant clientele, it became an absolute necessity, with most activity shifting to online and remote overnight. Based on the 2021 Diary of Consumer Payment Choice by the Federal Reserve Bank of San Francisco, the number of consumers conducting in-person payments fell by nearly 21% year over year, even as not-in-person spending at restaurants “increased substantially.”

Restaurants cannot ignore these trends, given the numerous challenges in their adoption and the subsequent threats of payments fraud. As more and more restaurants start processing an increasing volume of noncash payments, payment fraud at restaurants has also increased significantly.

These percentages and patterns are anything but small. In fact, they’re seismic as they are accelerating trends already in motion with the advent of smart devices and improving internet speeds. Consumers have been altering their spending away from cash at an ever-faster rate for the better part of a decade. The focal point of all human activity is growingly centered around their smartphones, and spending habits are no exception. Even physical rather than digital currencies are seen as sovereign existential threats.

In this article, we’ll explore the many different forms of payments processed and how restaurant payments fraud is becoming rampant. There is also the case of the changing legal liability and what security precautions the industry can implement in response to nip restaurant payments fraud in the bud once and for all.

Types of payments

Gone are the simple days of paying by cash, credit cards, or debit cards. Now, they’re a myriad of payment options, and consumers not only wish they could use to pay by but rather demand it. There are options such as Payment Service Providers such as PayPal, Zelle, Venmo, Cash App, and a multitude of digital wallets, including Apple Pay, Google Pay, and Samsung Pay, among a host of others.

The threat of losing customers by not offering that ease of payment is very real. The pendulum has swung such that restaurants unable to cater to such payment options face ubiquitous competition from those that can. Below is a more in-depth account of some of the standard payment types being adopted.

Swipe – this is the traditional way in which consumers have been accustomed to using credit cards over the past couple of decades. The merchant would swipe the credit card through a card reader that scans the black-colored magnetic stripe on the lower backside of the credit card.

Dip – a relatively new and more secure way of processing a card transaction. With the new EMV chip, the merchant dips the card into a particular reader that captures the data stored on the golden-metallic colored chip. This payment method has proven to be less prone to fraud as the EMV chip is almost impossible to duplicate, unlike a

Tap – this is the latest method of payment in which smart devices such as a smartphone, tablet, or smartwatch exchange payment details stored on those devices with near-field communication (NFC) enabled point of sale terminal by either touching it or placing the device very near the machine.

The Growing Risks of Restaurant Payment Fraud

There has been a growing chorus within the industry sounding the alarm on an increase in payments fraud targeting the restaurant activity. One specific activity is the root cause of restaurant payment fraud. It all stems from something known as chargebacks but can vary in the different ways that fraud manifests itself.

Chargebacks are disputed payments that consumers raise once they see unfamiliar charges on their account statement. Once a cardholder files a chargeback, their issuing bank withholds disbursement of funds intended for the merchant to investigate the transaction. Chargebacks can be classified as ”friendly fraud” or true fraud.

Chargebacks arising from true frauds are a result of stolen card information being used to process the transaction. There has been a substantial increase in true frauds at restaurants as the industry has started taking in more digital orders and delivery requests in which the physical card isn’t present.

Friendly fraud (do not be fooled by the name) occurs when the rightful owner of a card uses it to pay for a meal at a restaurant and then later disputes the charge on the card. This is often due to dissatisfaction with the service, food quality, or actual malintent. However, friendly fraud can also arise due to the customer not recognizing the transaction based on the descriptors used by the merchant. It can also be that there is no contact information to reach out to the merchant directly, so the cardholder instead simply calls the bank.

The main driver of this increased level of restaurant payments fraud has been driven by payments by card in which the cardholder is not physically present for the transaction, also known as Card Not Present.

The EMV Liability

Earlier, we discussed Dip as one of the payment methods used where the restaurant would dip the EMV chip-enabled card into a special EMV chip card reader. That is presently the most secure method of payment as an EMV chip stores all cardholder data in an encrypted format and transfers cardholder data via a process called tokenization. EMV cards still have the older magnetic stripes at the back of the card, so merchants can still use the older swipe technology.

The EMV liability shift is that if a merchant swipes an EMV card instead of using the dip option for any reason whatsoever, it is the merchant who will be liable for any fraudulent charges exceeding $25. Hence the term liability shift explains that the liability has shifted from the issuing bank to the merchant, in this case, the restaurant.

Safety measures

Considering the prevalent frauds and the changing liability landscape, it helps to understand what safety precautions are available to minimize restaurant payments fraud. Below are some examples of what measures restaurants must implement immediately.

EMV readers – to avoid the liability shifting to restaurants, all POS equipment, and card readers must have EMV capabilities. EMV-enabled cards have a nano computer installed into them that stores all the cardholder information, which cannot be duplicated or tampered with and is additionally protected by encryption and tokenization.

Point to Point Encryption (P2PE) – If POS equipment is P2PE enabled, it employs additional security measures in which cardholder data is encrypted at the point of capture and is decrypted at the endpoint, i.e., the bank receiving the data to process the payment.

3D Secure – During the authorization process of accepting a card payment, the industry is increasingly adopting the 3D secure option that is employed by all major card networks. 3D secure creates a code for a single-time use and sends it to the consumer to enter into the payments gateway to verify their customers’ identity and that it matches all internal contact information on record. This is another security layer considered to be very effective in authenticating customer identity by payment processors worldwide.

PCI Compliance – all these mechanisms, along with additional measures such as tokenization, Address Verification Systems (AVS), Card Code Verification service (CVV2), and AI-powered fraud detection and monitoring, are all security measures codified in the Payment Card Industry Security Standards Council (PCI SSC) guidelines. PCI Compliance can help in reducing restaurant payments fraud down to zero.

Employee Training – One of the best ways to minimize restaurant payments fraud is to increase the awareness of the various fraudulent activities among your employees. Your staff is on the front lines of your restaurant operations, and they will be your best defense in ensuring that there are limited occurrences of fraudulent activity.

Restaurants are making a form of investment when they train their employees in not just detection of payments fraud but good customer service. A great customer support experience can mask fraud detection protocol, given the intrusive nature of requiring additional personal information to authenticate a transaction.

Furthermore, staff should have appropriate training on common inquiries versus payments fraud activity versus customers calling in to verify a charge they see on their account statement. Employees should know the differences between these scenarios and understand the process of how to escalate them with management.

Billing Descriptors – Last but not least, billing descriptors are an essential defense to avoid restaurant payments fraud. Effectively using billing descriptors can go a long way in avoiding friendly fraud.

A billing descriptor is what cardholders see in their statements to identify specific charges. Every time a merchant charges a cardholder, they have to select specific information about their business and the nature of the transaction that will appeal on the statement the cardholder receives. It is often this information is unclear that leads to many friendly frauds. The cardholder may not recall the name of the business mentioned, they may not understand what they purchased, and there may be no contact number listed to clarify the charges.

As a result, some best practices for effective billing descriptors to avoid chargebacks classified as friend fraud are:

Always include the business name of the restaurant the customer visited. Not the trade name or the parent company name, but the actual venue the customer visited. This would be the best way to help a customer remember what, when, or where the charges occurred. So, if you are a Taco Bell, a Pizza Hut, or a KFC, your billing descriptor should mention precisely that, not Yum! Brands, the conglomerate that is the parent company of these businesses.

Also include the address of your business. It doesn’t need to be the complete address, but the street name along with the venue can help.

Finally, listing a contact number can help customers quickly access that number to call the restaurant directly to verify the charges. It is a lot better for the cardholder to call the restaurant rather than their bank to dispute those charges. Even if your business wins a disputed chargeback, too many of those and your business may be classified as a high-risk merchant.

Be careful contracting with Food Delivery Platforms: Food delivery platforms such as Deliveroo, Uber Eats, DoorDash, and others have a direct relationship with consumers ordering food from your restaurants. Technically, they are customers of the food delivery platform and not your restaurant. Their contracts should hold the restaurants liable for any fraudulent card activity on their apps. Furthermore, it is essential to ensure that the platforms have strong data protection and security protocols to limit credit card fraud.

The restaurant industry has undergone many transformations in the last couple of years. Digitization of the overall transaction and the payments by cards and other noncash means became the de facto standard overnight. All the while, the actual volume of transactions in the new form skyrocketed.

These were small shifts, but rather seismic, and they were sudden. And although the restaurant industry was unprepared for the influx of such a change and contended with significant amounts of fraudulent activity during that transformation, many restaurant owners learned that there are ways to manage the risks of these changing times and thrive. The industry still faces many hurdles and growing pain. However, the shifts in consumer spending habits and smart devices dictating more of how they spend their time and money are likely to increase. The changes restaurants have undergone over the past couple of years will be a permanent fixture and likely to intensify. As a result, restaurants must adapt specific best practices in managing the changes in payments platforms, shifts in legal liability, and the potential for payments fraud.

A Guide to Affiliate Marketing in 2022

The affiliate marketing approach has become incredibly popular in recent years. Spending in the Affiliate marketing sector has grown from $5.4 billion in 2017 to $8.2 billion in 2022, and it looks like it will only continue to grow further.

It’s not difficult to see why, as it provides numerous benefits to both brands and affiliate marketers. It can be a great way to generate sales and revenue while giving the impression of a more organic marketing approach.

In this article, you’ll find a detailed explanation of what affiliate marketing is and how it works, including its different types, examples of affiliate programs, and a few tips on how to become a great affiliate marketer.

What is Affiliate Marketing?

In affiliate marketing, you earn a commission by recommending products or services manufactured by another company. The affiliate partner is compensated when the store or advertiser achieves a specified result, usually a sale.

Some programs, however, will pay you for leads, free trial users, website clicks, or app downloads.

Affiliate networks are usually free to join, so you won’t have to worry about significant upfront costs. This performance-based opportunity can transition from a side-hustle to a viable online business idea by providing you with a steady income.

How Does Affiliate Marketing Work?

Here’s an example of how the affiliate marketing process works:

On your website, blog, or social network, you post an ad for Store Z.
Customers click on the link.
They buy something from Store Z.
The affiliate network records the purchase.
Store Z confirms the purchase.
The affiliate network pays you.

The commission rate varies depending on the company and the offer. Generally, you can earn about 5% of sales, but with some arrangements, you can earn as much as 50%, usually when promoting a class or event. A flat rate per sale is also available in affiliate marketing programs instead of a percentage.

How do Affiliates get money?

Earnings from affiliate marketing vary widely. Some marketers make a few hundred dollars per month, while others make six figures per year. As you gain followers, you can make more money.

You’ll find that affiliate programs offer a variety of payment options. Businesses may refer to it as a conversion type, a price or payout model, or another variation.

Marketing for physical products is typically aimed at generating sales. Regardless of what it is called, the payment model specifies the goals you will be compensated for. If you’re promoting software, you might ask people to sign up for a free trial.

Affiliate programs frequently use last-click attribution, which means that the affiliate who receives the click before the purchase receives full credit. As programs improve their attribution models and reporting, this is changing. In cases where a buyer’s conversion funnel had several affiliates, a brand may credit you equally for a sale.

Affiliates are typically paid in one of five ways:

Using pay per click, you receive commissions when your affiliate link is clicked. Pay per click is a service used by large retailers to promote their products. Customers are not required to join the merchant’s website or complete a purchase.
In a pay-per-sale model, you receive a commission with every sale. Ecommerce companies often use this method to pay their affiliates.
A pay-per-install program compensates you for every installation your website traffic generates. The purpose of your content would be to promote mobile apps and software so that users would download and install them.
With pay per action, you are rewarded for each action a customer takes. Affiliate programs use this payout model because it can apply to various offers, such as a subscription to a newsletter, a click, a form submission, and so on.
The term “pay per lead” refers to getting paid every time someone signs up for something. It’s a common payout method since companies use it for sweepstakes, lead generation, and other deals. Newcomers prefer cost-per-lead offers because generating leads is easier than selling things to an audience.

What Are the Different Types of Affiliate Marketing?

Affiliate marketing has three types of advertising, unattached, related, and involved. Take a look at each:

Unattached

Unattached is the most basic form of affiliate marketing. In this type of advertising, the affiliate has no connection with the product or service being marketed. They cannot function as an authority or make claims regarding its use. Because the affiliate does not commit to the potential customer and product, they are not required to recommend or advise.

Affiliate marketing, as its name implies, involves promoting products or services by affiliates related to the item or service they are promoting. Affiliates are typically linked to a product or service based on their specializations. Affiliates have enough authority and influence to drive traffic, and their level of expertise establishes them as trustworthy sources. Affiliates, however, do not make any guarantees about the product or service.

Involved

Through this type of marketing, affiliates create a stronger bond with the product or service they are promoting. The user has used or is using the product and believes it will benefit others. Users’ personal experiences serve as advertisements and are reliable sources of information. Furthermore, as they are offering suggestions, any problems resulting from the service could jeopardize their reputation.

Pros and Cons of Affiliate Marketing

Advertisers and affiliate marketers may benefit greatly from affiliate marketing. Corporations benefit from low-cost advertising and the affiliates’ creative marketing efforts, and affiliates earn additional revenue and incentives. Affiliate marketing generates a high return on investment because the company pays for traffic that results in sales. Any advertising costs are the affiliate’s responsibility.

Affiliate networks have tight guidelines on how affiliates can generate leads. For instance, a few affiliate marketing programs specify how a product or service should be discussed in the content before an affiliate link can be recognized. In addition, there are prohibited methods, such as spyware or adware, which redirect product search inquiries to an affiliate’s site.

An affiliate marketing program can be fraudulent. A good affiliate marketing program must therefore be carefully planned. A contract arrangement that compensates for traffic rather than sales must be clearly stated.

Misspelled domains can be squatted by unscrupulous affiliates and used to redirect traffic to their sites. Using fraudulent or stolen information, they can fill out online registration forms, buy AdWords on search phrases where the company already ranks well, and so on. It is necessary to monitor and enforce affiliates even if the terms and conditions are explicit.

By exchanging goods and services, a firm can access motivated, creative individuals who can assist it in marketing its products internationally.

Some of the advantages and disadvantages of affiliate marketing include:

Pros

The ability to access a broader market
Improved tracking of qualified leads
Advertising at a low cost

Cons

Vulnerable to fraud
Creative control is reduced
Stealing is a possibility

How to Start with Affiliate Marketing

Affiliate marketing is really easy to get started with. Choosing a program and an approach, defining your niche and audience, finding the right product to promote, and choosing a platform are the only steps you need to take.

Affiliate marketing requires the same dedication and discipline as running your own business. Follow these steps to succeed:

1. Find a program and choose your method

Your first step is deciding on which platform you will create an audience. Affiliate marketers have their strategies and platforms. You can choose from many affiliate marketing concepts based on different approaches.

Digital content creation: Bloggers, YouTubers, and social media influencers are examples of digital content creators. They specialize in creating content that appeals to a specific audience. The idea is to focus on products that organically resonate with their audience so it doesn’t feel like advertising. As a result, the likelihood of them purchasing increases, and you earn affiliate commissions.
Niche topic and review websites: These sites either review products for a specific audience or compare a product line to its competitors. You must post regularly and generate content relevant to the review field to attract an audience.
Courses or Trainings: If you teach a yoga class or have a workshop, you can take advantage of that space to push your affiliate partnership.

No matter what path you choose, the two most important aspects of affiliate marketing are authenticity and audience building. Your audience cannot be converted into affiliate sales if you can’t connect with them authentically.

The following marketplaces offer affiliate marketing programs:

2. Choose your niche

Consider something you are passionate and knowledgeable about when choosing a specialty. In this way, you appear genuine and a good source of information to prospective customers. Furthermore, it helps you determine which products and brands to market.

The niche you choose for your affiliate site determines how much effort and time you will need to put into it before you can start seeing SEO benefits.

For example, blogs with ample marketing budgets dominate the SERPs for marketing, healthcare, and software. You need to identify untapped areas where competition isn’t as fierce and get there before your competitors do.

To learn more about your audience and what they like, try using affiliate marketing tools such as website analytics, social media insights, and social listening tools.

Understanding why your target audience follows you is important.

It is important to remember that you are not paid to publish. Affiliate marketing is a pay-per-performance business model. Knowing what your target audience enjoys, you can suggest the best products to them and increase your affiliate income.

3. Find the right product

Affiliate marketers need to relate to their audience to earn money. The products or services they promote must be products they want to purchase. In the eyes of your audience, a mistake here will undermine your credibility and sabotage your success.

It’s okay if you’re unsure where to look for products or brands to work with. Several affiliate marketplaces are available, including:

It is also possible to check the websites of the items and services you use to see if they offer affiliate programs. Often, large corporations promote affiliate programs on their websites, such as Amazon Associates and Shopify.

Consider taking a more direct approach. If you find a fantastic product, contact the owner to see if they offer affiliate programs. If they don’t, they may be willing to come to an arrangement with you, such as offering you a special promo code to share with your followers.

You can get excellent deals when you approach a seller of a new fitness product if you’re a health and wellness blogger and already have a proper distribution channel in place.

For affiliate marketing schemes, you must follow the terms of service. Be sure to read the small print. A link usually contains a cookie with a specific expiration date, and some programs won’t let you purchase pay-per-click ads using the product or company’s name.

4. Choose the right platform

If you brainstorm products or browse affiliate sites, you must remember that the product should align with your audience or the audience you are trying to build. What might your intended audience find useful? Does it relate to your expertise?

For instance, a cuisine blogger is unlikely to sell beauty products. A better choice would be kitchenware, meal sets, gourmet ingredients, or even aprons.

You should also ensure that the product or service you’re offering is appropriate for the platform on which it is being promoted. For instance, clothing and decoration-centered products are ideal for image-rich platforms such as Instagram. Meanwhile, for products with more interaction, such as software, you are better off using longer-form venues, such as a blog or YouTube video, which may yield higher conversion rates.

Consider the following when choosing a platform:

What platforms do you use most?
Which platforms are most familiar to you?

Affiliate marketers commonly use the following platforms:

Instagram
Facebook
Pinterest
TikTok
Blogging
Pay per click (PPC)

Using a marketing platform, you’re comfortable with helps you create high-quality content. As a result, you’ll have a stronger, more engaged audience you can convert into sales.

Best Practices for Affiliate Marketing

To make sure you are getting the most out of your affiliate marketing program, follow these tips:

Engage and establish a relationship with your audience: Authenticity is crucial, as is establishing a relationship with your audience and keeping them interested. Provide honest feedback or recommendations whenever possible. Misleading information can damage your reputation and relationships with your audience and affiliate partners.

Experiment with affiliate marketing: Partnering with a single affiliate can be risky. We recommend partnering with a broad range of affiliates. Make sure you have more than one partner, just in case things go wrong.

Make good decisions with analytics tools: Data is your friend. Using data, you can determine when to post, what kind of content performs well with your audience, and what content is most engaging.

In addition, keep an eye out for rising trends. You can monitor search volume for specific themes or keywords using keyword research tools or Google Trends.

Provide easy access to your affiliate links: Make it easier for viewers to locate your affiliate connections. You can encourage people to purchase by including links in the description box or bio or using a compelling call to action.

Focus on your specialty: If you work in a competitive field, finding your specialty is crucial. Use keyword research tools to find out what people are searching for and what regions you might target. Your goal should be to stand out and establish yourself as an expert in your field.

Improve your content: There is always room for improvement. To increase your search engine optimization, you must also examine data. Establish what your audience responds to most (content type, platform, product) and develop content that reflects their interests.

Affiliate Marketing Trends to Look Out for in 2022

Two trends have become incredibly popular in the last few years: social selling and omnichannel options. Here’s a breakdown of both:

Social selling

Social selling can be done through video platforms that allow you to create and sell videos. You can communicate with your audience and promote affiliate products through these platforms.

Moreover, don’t ignore the power of smaller influencers. Even though micro- and nano-influencers have fewer followers than their mega- or macro-contributors, firms are more likely to collaborate with these influencers.

Micro- and nano-influencers have a loyal following and are more genuine. This type of influencer has a high engagement rate because their relationship is based on trust. A small but dedicated audience and competence in a specific niche are all you need.

Omni-channel options

You can broaden your reach by providing omnichannel experiences to your audience. Make sure you go to where they are most likely to spend time. If they’re on social media, take advantage of that and target that channel.

It’s not to say you won’t consider other options. Your visibility will increase if you find an alternative or newer communication channel.

Conclusion

Affiliate marketing can work as either a new source of revenue or a low-cost marketing channel, depending on if you are the affiliate marketer or the product vendor. The beauty of this system is that it can take many forms and be used across a wide range of channels to fit the needs of any niche. You can use social media channels to make your efforts feel more organic to your audience, increasing the likelihood that they’ll follow your links, buy the products you recommend, or otherwise take the actions you want them to.

How to Start a Business in 10 Steps

With the rise of the gig economy and entrepreneurship, there’s never been a better time to start a business. You probably already have an excellent idea, but it takes much more. A lot of paperwork and resources are involved in starting a business, which can be difficult for people to manage.

Beyond your idea, all you need to start your own business is a guide that can help you understand and navigate the process of starting your own business, which is what you’ll find in this article.

Follow this comprehensive guide to start your own business in just ten steps.

10 Steps to Start Your Own Business

The following list summarizes the business-creating process into ten steps, but there are also tangential processes. You should read each item on the list carefully to ensure you don’t miss any of these “mini-steps”.

1. Define Your Idea

To start a business, you must decide what type of business you will run. You should conduct a market analysis to ensure that the demand is sufficient and that there is not too much competition. The challenge of finding small business ideas can be approached methodically by utilizing tried-and-true methods.

If you’re starting a business, you’ve already decided what you want to offer online, or at least what market you will target. Check online to find out what businesses exist in your niche. Look at what other brands are doing and how you can improve. The opportunity to develop a business plan is available to those who believe they can offer something that other companies cannot (or can provide the same thing faster and cheaper).

Work out the essential details during the ideation process. If you don’t like the idea or there’s no market for your invention, you should come up with another one.

2. Create a Business Plan

Writing a business plan helps solidify your idea and can streamline the process of creating a business by forcing you to sit down and think things through carefully.

When you know what your “known unknowns” are, it simply means you aren’t actively prioritizing finding a solution right now; this is far preferable to being caught off guard, especially if you have trouble answering these questions when seeking funding.

The following is an outline of a business plan:

Company description and name
Research on the market
Organization and administration
Itemized list of goods and services
Customer segmentation
Marketing plan
Operations and logistics strategy
Financial plan

3. Secure Funding

When you start a business, you will incur costs and need to decide how you will pay for them. Would you be able to fund your startup on your own, or will you need to borrow money? Can you set aside enough money to support yourself until your business makes a profit if you want to leave your current job to focus on your business? Calculating your initial expenditures is a good idea.

Startups frequently fail because they run out of cash before earning a profit. Starting a business can take a long time to generate sustainable revenue, so it’s never a terrible idea to overestimate your budget.

Common ways to fund your startup

There are many approaches you can take to secure funding for your business. Consider the following options:

Business loans: Obtaining a business loan from a lender is a good option if you have a good personal credit history and require startup funding.

Personal investors: Entrepreneurs may seek personal investors in the early stages of their business, as well as venture capitalists or angel investors.

Grants: Many grant programs offer grants to target businesses based on various factors, such as veteran-owned, minority-owned, for-profit, women-run, and others.

Crowdfunding: You can always crowdsource funds online from a group of people if you don’t wish to pursue the standard funding route.

Open a business bank account

You should open a business bank account and obtain a business credit card to simplify handling your finances. Having separate personal and professional accounts simplifies tax preparation and can streamline some financial aspects of running a business. This is very helpful if you want to learn how to start without any money.

4. Choose your business structure

The right structure combines the legal protection and financial flexibility you need. If you want to start your own business, you should carefully consider your decision when it comes to its structure.

Businesses can take on many different forms depending on their country and region. The most common are sole proprietorships, limited liability companies (LLCs), and corporations.

Types of business structures

Sole Proprietor: You should pursue a sole proprietorship if you are the only person working for the business, and it is typically the least-effort form, but it makes you personally liable for the business. It is possible to hire staff as a sole proprietor, but you will need an employment identification number (EIN), which requires registering your business.

Business Partnership: A business partnership is an association where two or more people are liable as business owners. You can partner with someone who has skills that complement your own. Bringing in someone to help your business succeed is a good idea.

LLC: An LLC is a limited liability company. The business owner is protected from financial obligation if the company is sued. One or more proprietors can form a limited liability company (LLC).

C Corporation: C corporations are business structures in which proprietors pay taxes. Corporations are owned by their shareholders, each of whom holds a fractional share. Large international companies typically use c-corporations. Small businesses can use them to raise capital by issuing stock.

Business structure factors

How do you know which business structure works best for you? Consider the following factors:

Location: Your country’s laws will dictate how you can build your company and whether you need a license.

Business type: Some structures are more suitable for firms of a particular size or industry. It is not unusual for large companies to request that their suppliers and partners be included. Restructuring may be necessary if you are to work with new partners.

Partnership or solo: If you’re a lone founder, you might consider more streamlined options. Having a business partner or several owners may require you to consider more complex options to ensure everything is set up and shared correctly.

5. Obtain Licenses and Permits

Getting a variety of business licenses will be necessary before your business can legally operate. For example, you need to register your company with the federal, state, and local governments. Several documents need to be prepared before registering, including:

Operating agreements and articles of incorporation: To become an officially recognized company entity, you must register with the government. The articles of incorporation of your corporation provide your company’s name, purpose, corporate structure, stock information, and other information. Operating agreements are required for some LLCs.

EIN: You may need an EIN (Employer Identification Number) after your business is registered with the IRS. While this is not required for sole proprietorships without employees, you may want to apply for one to separate your personal and business taxes or save yourself the hassle if you decide to hire someone later. IRS has developed a checklist to help you determine if your business needs an EIN. An EIN can be obtained online for free if you need one.

Tax forms: To comply with your federal and state income tax obligations, you must also file specific forms. Your business structure will determine the forms you are required to file. See your state’s website for information on state-specific and municipal tax duties. You may be tempted to wing it with a PayPal account and a social media site. When you start with a solid foundation, you will have fewer issues to deal with in the long run.

State or Federal permits: Some businesses require federal, state, and municipal licenses and permits to operate. You can use the SBA’s database to search for licensing requirements by state and business type. You can get a company license at the municipal hall nearest you.

Step 6: Purchase Insurance

In the event of an unforeseen event, business insurance can protect your business and personal assets. There are state-specific insurance regulations and requirements, but even if your state doesn’t mandate it, giving yourself and your business extra protection is still a good idea.

Listed below are a few examples of standard commercial insurance policies:

Liability protection insurance protects your company from legal actions caused by accidents, injuries, or negligence.
A commercial property insurance policy will protect your business assets from damage or destruction due to fire, storms, or theft. This coverage will also help repair or replace property, inventory, and equipment.
Workers’ compensation insurance pays for the medical care of employees injured on the job and lost wages. In most states, employers must have workers’ compensation insurance based on the number of employees they employ.

Step 7 – Choose Your Tools

Starting a business requires more work than one can reasonably handle. Small business owners should not underestimate the importance of good software, as it is among the best ways to lessen the heavy lifting required to run the business.

The use of software by entrepreneurs streamlines or automates repetitive tasks that don’t require much input. Software can also be deployed early to help with some marketing and sales activities. While there is a risk of becoming sidetracked by too many tools, there are segments of marketing that will profit from automation from the start.

Software to help you manage

Project management: Maintaining a central location to plan your work and keep track of critical activities can be extremely helpful even if you work alone. Connective tools like Zapier are ideal for connecting and automating your most common workflows. Tools like Trello and Asana can help you stay on top of things.
Accounting software: Accounting software helps you document everything from a meal with your business partner to a large inventory order, making it one of the best ways to start your business on the right financial foot.
Website building and management: Choose an eCommerce platform or website builder that provides you with the ability to handle all of the key tasks involved in managing your business. ECommerce enterprises must consider various factors, including performance, payments and checkout, and omnichannel capabilities. You should choose a theme that complements your product lines and allows you to manage orders quickly.
Email marketing: Setting up cart abandonment and welcome email sequences can benefit companies even before their first sale. In addition to your online store, your email list is another thing that genuinely belongs to you. It allows you to communicate directly with your clients without relying on third-party algorithms.

Step 8 – Choose Your Team

After learning how to start a business, it is time to hire workers to manage it.

What skills will you need to start your own small business? How much work will you have to do at launch? The launch timeframe and the investment amount depend on the answers to these questions.

If you intend to do all of the work yourself, you will be limited by the amount of time you have available. If you plan to hire staff, you must factor in those expenses and the time required to recruit and hire freelancers and employees.

The following positions may require hiring:

Inventory managers are responsible for updating your inventory.
Customer service coordinators are responsible for resolving customer issues.
Social media managers promote your social presence and generate interest.
Advertising experts drive traffic to your website
Graphic designers can produce the assets you need for your marketing materials.
Marketers plan and create content for emails, websites, and other campaigns.

Step 9 – Select Your Vendors

Managing a business can be challenging, and you and your staff are unlikely to be able to handle everything on your own. Companies in every field, such as human resources and business phone systems, can help you manage your business more efficiently. This is where third-party vendors come in.

It is very important to be selective when searching for B2B partners. Choosing an organization you can trust is essential because it will have access to critical and potentially sensitive business information. Experts recommend asking potential suppliers about their experience in your industry, track record with existing clients, and the type of growth they have helped previous clients achieve in our guide to picking business partners.

Step 10 – Market Your Business

Branding is more than your logo and name; it is how customers perceive you when interacting with your small business. Creating a brand and attracting a following of eager individuals to buy your product or service is the final step you need to take before you begin selling. However, building a brand from the ground up is a challenging endeavor, yet it is necessary if you want to stand out among many competitors.

Typical branding aspects include:

Logo: A logotype is a text and image-based symbol that represents your company. Choosing a logo that communicates your ideals and expresses what you do is important.
Company colors: A company’s visual identity is determined by its colors, logo, and typeface. Human emotions are stirred by visuals, which reinforce your brand’s position and experience.
Messaging: An identifiable voice across all your touchpoints humanizes your brand and helps you connect with your audience on a more personal level.
Brand positioning: A brand position identifies who your company serves. It tells your target audience why you are the best choice for them and what makes your services stand out.

Once you’ve established your brand, use these channels to promote it:

The company’s website. Ensure that your online reputation is reflected on the company’s website. Your website serves as digital proof that your small business exists, and many customers use the internet to learn more about a company. It is also a great way to communicate with existing and prospective clients.
Social media platforms: Use social media platforms to spread the word about your new business and offer coupons and discounts once you’ve launched. Choose the best social media channels based on your target audience.
CRM: The best CRM software systems enable you to store customer information to better market to them. You can reach out to your customers and interact with your target demographic by implementing an effective email marketing strategy. Creating an email marketing contact list is crucial to success.

Conclusion

Even if you summarize it to a 10-step list, starting a business is not an easy task. Each step on this list will take significant time and effort, not to mention resources. Nevertheless, it’s not impossible. Start your journey to becoming a business owner if you have a solid idea for which you did sufficient research. Make sure you carefully follow each step and examine all the variables that may impact your business proposition. It’s impossible to know what will happen, so it’s best to be as prepared as possible.

Clever Marketing Tips to Improve Restaurant Sales

It’s not easy finding ways to improve your restaurant’s profit margins while managing food and labor costs. A business’ bottom line is the priority of the operation, but in a customer-facing business, going about it the wrong way can do more harm than good.

But that doesn’t mean there aren’t ways to improve your sales while maintaining a balance between customer satisfaction, costs, and profit margins. It’s all about implementing new strategies and techniques. By using the tips below, you can improve your restaurant sales significantly.

In this article, you’ll find a list of strategies you can adopt to help you improve your restaurant sales.

14 Marketing Tips to Help You Boost Restaurant Sales

From adopting new marketing channels to doing events in your restaurants and much more. Here is the list of marketing tricks that you should start using today:

1. Take Advantage of Social Media

Social media is probably used by most of your customers. You should use it too. Restaurants with a strong social media presence dominate their “unsocial” competitors. Make yourself available where your clients are.

Become a social butterfly by setting up a free social media management platform (such as Hootsuite) to monitor your channels’ activity and engagement. These venues are a great way to promote your daily specials and share mouth-watering images. Your business should have a Facebook profile, a Twitter account, and an Instagram account.

Social media could be extremely useful when announcing a limited-time sale or discount. If possible, update these pages regularly with images and information about upcoming events your restaurant will host. You can also use these pages to inform customers of changes to the restaurant’s menu or hours.

Ensure you communicate with your clients via these pages, including their comments, and don’t ignore negative feedback. You could keep track of all customer comments using your restaurant’s point-of-sale system. These activities will help generate new ones and increase the restaurant’s overall sales.

2. Make Your Customers Feel Appreciated

It’s a restaurant’s job to attract and retain consumers. Existing clients might be your most influential supporters. Ensure your patrons feel comfortable and at home, serve them with care, and go above and beyond expectations. Make your customers feel special by serving slices of pizza and pastries. The result is greater customer loyalty and a better customer experience.

They will spread the word about how fantastic your restaurant is if you treat them well. When customers visit your restaurant, make an effort to recognize them, their prior orders, evaluations, and how you assisted them. This information can be obtained via your customer database.

Use this information to recommend new foods or offers, which will make them feel appreciated. Regular customers generate more revenue for restaurants than new consumers. Therefore, customer retention becomes vital. Frequent shoppers promote your restaurant through word-of-mouth and bringing in friends and family, enhancing your restaurant’s revenue.

There are numerous ways to reward loyal customers for their continuous patronage. The proper one depends on factors such as your budget, business type, and personal choice.

Casual dining establishments may utilize punch cards or coupons. However, more upscale companies may utilize app- or email-based services. The idea is to keep the process simple on the customer’s end so that they engage, regardless of the approach used.

3. Improve Your Table Turnover Rate

Surely, you have had restaurant patrons who dined at their own pace. These customers take longer to leave your restaurant, resulting in a lengthy line. You may even lose customers if your restaurant is full since they may choose to dine elsewhere.

The more tables you turn every hour, the more money you earn per hour. Provide your staff with the necessary tools to boost service speed and effectiveness?

For instance, servers can send orders directly to the kitchen from a mobile point of sale (POS) device. Therefore, they no longer need to rush back and forth between a stationary terminal impeded by other servers.

As a result, your effort to improve restaurant sales is not limited to increasing your customers’ purchases; increasing the table turnover rate is another way to increase sales. By increasing your table turnover rate, you will be able to serve more customers daily. However, this does not mean you should speed up the customer experience.

To solve this problem, ensure that orders are immediately sent to the kitchen and served as quickly as possible. You should also make sure that checks are presented and collected on time. Immediately after your guests leave, you should bus and reset the tables, and you should have the appropriate number of tables for an average dinner party size. You can please your customers and turn tables with quick and effective service.

4. Upsell

Upselling entails enticing clients to purchase additional items or enhance their current purchases. It’s one of the most prevalent methods for restaurants to increase their earnings.

Training your waiters in the art of upselling will make them great salespeople. Simply making suggestions for additions can increase the overall order size.

For your team to properly upsell menu items, they must be well-trained. If the wait staff does not create a connection with the clients or is unfamiliar with the menu, no upselling approach will be successful. In addition, you can offer complimentary samples of the new items you’ve added to your menu to improve restaurant sales. This will draw attention to these dishes and boost the likelihood of additional orders.

Furthermore, your POS system can improve the average check size and boost restaurant revenues by urging servers to recommend add-ons and emphasize pricey modifiers.

5. Adopt Online Ordering and Partner with a Delivery Service

Nowadays, many prefer ordering food online to dining out at a restaurant. By offering online food delivery, you could reach out to new clients and expand your clientele.

Using online ordering to handle more orders and boost revenue can be beneficial if you have a limited number of seats or a shortage of waiters but a large staff of cooks.

In today’s app-driven world, convenience is king. Consider partnering with a prominent delivery service, such as Seamless, GrubHub, or DoorDash.

Deliveries are a great way to increase a restaurant’s sales. You can streamline your order process, attract new customers, and satisfy existing customers from the comfort of their smartphones.

6. Update Your Menu

of the menu’s items, your location, and your target demographic. For example, if your target market is college students, you should offer affordable prices. On the other hand, if your fine dining establishment targets people in an upscale area, you can charge a bit more.

Is your menu a random collection of appetizers, entrees, and desserts? If so, you might want to consider revising it. The quality of your menu items is meaningless if you’re not generating their maximum revenue potential. It may be as simple as renaming a traditional item or placing your highest-margin items on your menu where customers’ eyes will land first.

If you have been distributing the same version for years, think about updating biannually or seasonally. Social media and other marketing methods can also promote a new menu. Bonus points will be awarded if you can take high-quality photographs of a few dishes.

Find out how much the menu will cost in your area before deciding what to charge. The Menu Price should be determined based on the surrounding market and competitors. You will lose sales if your competitors offer the same meal at a lower price. The price increase of your menu items will increase your restaurant’s net sales. But make sure you know how to increase the price of your menu items. An abrupt increase in prices of menu items will not be well received by customers. Therefore, try increasing your prices in small increments that will not be noticed by your customers but will increase sales and profits for your restaurant.

7. Do Holiday Offers and Happy Hours

Holiday specials are one of the best ways to attract existing and new customers to your business. It is a widely used strategy but never fails to bring in additional customers. Your restaurant’s revenue will undoubtedly increase with such a plan. Why not offer free rum cakes, liquor chocolates, or donuts to your consumers during the Christmas and New Year’s holidays? Freebies are sure to attract customers.

Restaurants know that liquor generates the most revenue and profit. Likewise, if you wish to attract young adults, you should make sure that the alcohol is more affordable, as they usually do not wish to break the bank. That is where happy hour strategies come in. Offer two for the price of one on beer and drinks. This will also help you sell more menu items.

“Happy Hours” have the advantage of being scheduled during slow sales periods. As a result, they attract people to your restaurant during slow times, increasing sales. Use all marketing channels to effectively publicize your discounts and bargains. Using emails to promote sales and discounts has been proven to be effective.

8. Offer Smaller Plates or Snacks

The global snack food industry, worth $427.02 billion in 2020, is predicted to expand at a CAGR of 3.37 percent during the forecast (2021-2026).

Rather than ordering entire meals, customers today are increasingly opting for “mini-meals.” Therefore, you could also consider offering your consumers a greater variety of smaller dishes or selections. These options must include foods that can be consumed as snacks or shared by a group of friends.

9. Host Special Events

Your restaurant can hold comedy nights, karaoke nights, guest performances, and other interesting events to draw visitors on that day. However, to attract the maximum number of people to the event, you will need to do more than host it. Hosting events will not only bring in your regular customers but also expose you to many new consumers who will increase your restaurant’s sales not only for the evening but also in the long run.

You can host various unique events at your restaurant without putting a strain on profits or overworking your staff. Make sure your event runs smoothly with the right technology, whether it’s a father-daughter date or a wine and cheese tasting.

Streamlining communication between your workers and clients with event management software is possible. The result is higher revenues for restaurants.

Does your pizza rank among the best around town? Are your cocktails always in demand? Organize a virtual workshop or a physical workshop to showcase your skills.

In addition to generating additional revenue from workshop fees, extending your restaurant’s experience to include hands-on participation will improve customer loyalty. It is an excellent method for increasing restaurant sales without advertising.

10. Set Up Your My Google Business Profile

Google Maps will enhance your customers’ experience if they can see and contact your restaurant directly from Google. You will be able to reach more clients when you are recognized on Google, as it will make it easier for your clients to locate you online. You can also attract new customers by encouraging your existing customers to submit favorable reviews on your company’s page.

11. Adopt More Traditional and Modern Marketing Channels

Opening a restaurant and expecting customers to flood in is not enough. You need to market your restaurant properly. Marketing must take place both online and offline. Use classic marketing techniques like the distribution of flyers and pamphlets. You can win clients that aren’t particularly tech-savvy, who still like to read newspapers and pamphlets to stay on top of new restaurants in town.

Considerable importance has also been attached to email marketing in recent years. With this marketing method, you can cultivate a long-lasting relationship with your customers, which will increase restaurant sales. Keep your clients informed of the latest restaurant developments by sending them frequent newsletters.

Well-written restaurant newsletters have an incredible ROI. It’s one of the best methods for increasing sales. Several studies have shown that newsletters outperform social media. You have greater control over your target audience with newsletters.

You can also establish a short-term relationship with customers easily through SMS marketing. Your customer database already contains all the information about your clients, so why not use that information to increase restaurant sales? If you want to offer a discount, send an SMS to all the clients in your database? You can include links to online shopping sites in these messages. Thus, customers will be compelled to visit the website and make a purchase, boosting your sales.

Get people to sign up with an offer, such as “Get a Free Dessert,” and then send weekly offers to your growing subscriber list. Clients expect to receive these discounts, and you can anticipate increased restaurant revenue due to repeat business.

12. Leverage the Knowledge of Your Employees

Your best approach to operating your business and enhancing restaurant sales is to get input from your workers and employees about the necessary restaurant adjustments. Most likely, your staff will always have an honest opinion to offer.

Your employees will feel valued if you consider their opinions, which is crucial in the restaurant industry. As a result of regularly interacting with clients, they tend to have accurate opinions. To analyze and comprehend client behavior, you can schedule a monthly open house session or invite your staff to lunch at your restaurant once a week.

13. Take Advantage of the Data

You can increase restaurant sales and manage your business with the help of a POS system. Your restaurant’s point-of-sale system (POS) should provide real-time information about all restaurant activities, regardless of whether you are physically present. You should obtain information about the number of sales at your restaurant and across all outlets, the number of bills created, the number of offers and discounts given, and items that have expired and need to be reordered. You will then be able to speak with your chef and make any necessary adjustments to your menu once you have a complete record of all your sales.

14. Create Combo Meals

Combination lunches are an excellent way to attract clients, especially those with limited funds. Think about pairing your best-selling lunch items with a popular side dish and beverage. If you see a couple of burgers with French fries and a drink in a popular restaurant chain, you can assume they were sold as a combo. You can see this type of combination often at McDonald’s. Keep your combinations simple. Adding your high-profit, low-selling items to your low-profit, best-selling dishes is a great way to attract clients and increase your overall revenue.

Conclusion

Improving your restaurant sales is more than charging more for the items you sell. You also need to consider the marketing channels you are using, the offers the customer receives, your social media channels, and much more. Improving your customer’s experience will go a long way toward improving your retention, which will increase your sales. Make your restaurant more efficient through the effective use of POS systems to increase the table turnover rate, and try doing special events that can attract crowds during slow business hours.