There are several reasons why small businesses need strong credit card processing services in place, from ease and convenience to the customer to several records-related areas. And while much of the attention is naturally placed on the former area, the latter can hold just as much importance for your small business.
At Merchant Card Advisors, we’re proud to offer credit card services for all small businesses, and to explain how various areas of our services, including simple terminals and a robust API, provide value in multiple ways. In particular, while the term doesn’t necessarily refer to paper only like it may have a few decades ago, our processing systems help you “track your receipts,” so to speak, as a small business. Whether in digital or physical form, documentation of previous financial transactions is vital for any small business – let’s go over two particular areas where this kind of record-keeping is highly valuable and will save you both time and money.
Any small business owner or manager who has worked with credit card payments will be familiar with the chargeback, which refers to anytime a customer disputes a particular transaction with your business through their bank or credit card company. Chargebacks generally come up based on three broad dispute types: Validity of the charge, quality of the charge, or amount of the charge. Let’s look at each area:
Validity: Often the most serious chargeback attempt, this is one where the customer is claiming they do not recognize the charge at all. In many cases of stolen identity, validity disputes are some of the first red flags. If you have the proper documentation, however, and can send a signed receipt with the customer’s information on it, you can get to the bottom of the issue quickly and with no liability to you.
Quality: This is where a customer says they ordered a product, but then either received the wrong product or a defective one. Once again, basic documentation of what was ordered will help you figure this out quickly and efficiently.
Amount: Finally, perhaps the most common chargeback claim is for an amount discrepancy, but receipts can quickly prove one side or the other as incorrect here.
The other major reason why keeping receipts and sales documentation is so vital? Taxes. Every little area here might be important – small businesses may have higher tax rates than larger corporations, and being able to prove every dollar of your expenses and income will help you with everything from write-offs to paying the proper amount. The IRS recommends keeping all income and expense documents for at least three years, but many accountants recommend seven years – this is why it’s so important to have a robust system that allows for tracking of all this sort of information.
For more on how strong credit card processing systems help you “track your receipts” and why this is so important, or to learn about any of our merchant payment processing services, speak to the staff at Merchant Card Advisors today.