Table of Contents
From Dollar One — Chapter 1: Pay and Get Paid
Pay and Get Paid
You’re busy. You’re time strapped. You’re focused on crushing your side hustle and growing your business.
Whether you’re trying to make some extra cash or deeply passionate about your hobby and want to one day turn it into something more—growing a business can often feel overwhelming and hard to navigate.
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Maybe you’re starting a vintage sustainable shopping business or you’re a graphic designer wanting to create custom wedding stationary. Whether you’re selling a product or providing a service, you need simple, clear solutions to take the hassle out of your hustle.
That’s why you’re here. And we’re here with you.
In this chapter, we’re going to give you a crash course in saving time by:
1.Keeping track of your cashflow
2.Streamlining your business payments
3.Paying and getting paid—fast
1. Payment Terms 101
Before we get started, let’s define some basic payments lingo. What is a gross margin and what does it mean to reconcile your financial records? Swipe through these 12 commonly used payments terms to set yourself up for success.
The process of using only existing resources (savings, personal equipment, etc.) to run your business, with any earnings going right back into the business to ensure growth. It can be a helpful term for describing your business if you operate as one and lets people know that your business is entirely self-sustaining.
It costs money to run a business, and a burn rate is a way to measure how much is spent to run it by tracking all outgoing payments during a set time (usually a month). This includes supply, transportation and even petty cash expenses. Understanding your business’ burn rate can help you see where to possibly make cuts or how much to charge for your services.
The act of dating a transaction with a future date. This can help establish a timeline for you and the client of when the work should be completed and when payment is expected.
The money left over from sales after subtracting the expenses directly tied to making and delivering your product. This allows you to see how much revenue you are making on your product.
A document (basically, a bill) that you’d send to your client, listing the services you provided and the amount due to you for those services. Keeping your invoices organized and in check can save you precious time and put more profits in your pocket.
Net profit margin:
The grand total of all the money you’ve earned after subtracting costs related to the business like making and delivering the product, paying rent, taxes and bills. Once everything is squared away, what remains is all profit. As opposed to gross margin which just measures revenue earned, this helps you see how much profit your business is making as a whole.
Net 7, 10, 15, 30, 60 or 90:
These digits represent the number of days a client has to pay an invoice after they receive it from you, with 'net' meaning the payment is due within that specific timeframe. For example, 'Net 30' means the client has 30 days to make the payment after getting the invoice. It’s also important to keep these numbers in mind when paying the vendors and suppliers you work with. After all, you pay them to help you run your business, and they want to get paid on time to keep their businesses going strong too.
Different ways to pay for goods or services including debit cards, Interac e-Transfer transactions, wire transfers, cash, cheques and credit cards. The more payment options you offer your customers, the more you can boost your sales potential. Being able to pay how they choose removes friction, which can make your customers happier and more satisfied—ultimately driving more sales your way.
An instant transfer of money from one account to another, with—yes!—zero delays or waiting periods.
Matching and comparing your financial records, like invoices and payments, and making sure they’re accurate and on-point. This is important because it helps you keep your money game strong, and helping stay on top of your cash flow, ensuring that all your transactions are accounted for.
Information that accompanies a payment, including details about the purpose of the transaction (like a payment description or invoice number). Remittance data is handy when reconciling your accounts, prepping financial statements and making sure incoming payments are accurate.
Return on investment:
The meaning behind the saying “you’ve got to spend money to make money.” A return on investment is a way to see how much bang for your buck you got on an investment by looking at how much you made or lost compared to how much you originally put in. For example, if you want to sell your products at a convention, you may have to fork over some money to buy a table, but if you earn back the money spent (and then some) through sales, you’ve got a return on your investment.
2. Keeping track of your money
There’s a lot more to keep track of when managing your business finances versus your personal ones—and keeping them separate is crucial. From profits and cash flow, to paying for business supplies and paying suppliers, to filing and paying taxes. Carefully planning ahead and budgeting for your business can save you time, money, and most of all, spare you unnecessary headaches.
Here are some basic financial items you’ll want to consider and keep track of as you grow.
First, let’s start with your expenses.
Expenses are the costs you incur while you run your business. Think: all the stuff you have to pay to keep your business running smoothly.
Staying on top of the money you have going out is essential to making informed financial choices. It ensures you can keep your operations chugging along while you make money (and yes, earn a profit!).
These are recurring operating expenses that you must pay regularly, regardless of how much your business sells or produces. Some examples include:
- Keeping the lights on (workspace rent, utilities)
- Business insurance
- Your salary (and anyone else’s you pay)
- Loan repayments
- Business license fees
These are expenses that fluctuate depending on how much you produce or sell. Knowing your variable costs is the key to understanding how changes in your sales affect your expenses and profitability. Variable costs to track include:
- Materials used to make goods for sale
- Delivery and shipping fees
- Advertising or other promotional expenses
Pay attention to vendor agreements and payment terms.
Vendor and supplier payments fall under variable costs, too. Paying attention to payment terms with suppliers and vendors, like paying them in net 30-day payment cycles, helps you know when funds need to be paid and avoid late payment penalties that could hurt your bottom line.
Use Interac e-Transfer to pay your suppliers quickly and keep record of your payments.
Now for the exciting part!
The money flowing into your business includes everything from the cash you earn from sales, services you provide or any other incoming funds. Keeping an eye on (and making the most of) the money you’re bringing in is the key to leveling up your revenue.
This is the total amount of sales your business generates from the products and services you sell—an incredibly important number because it’s the money you’ll use to make a profit, tally up your income and pay business expenses with.
This is the total money your business makes in a given period of time before you account for expenses.
This is your total revenue minus the cost of goods and services you sell.
Don't forget to see what grants and loans you may be eligible for!
Small business loans can be a big help in getting your business off the ground, putting money in your pocket for start-up expenses and for better managing cash flow as you go (and grow).
A great place to search for loans you may be eligible for is the Canadian Government’s business grants and financing hub.
Easily verify your identity with Interac sign-in service to access participating online government services without having to create and manage a new user ID and password.
When it comes to managing finances, there are several important small business documents that you’ll want to familiarize yourself with.
Here’s a quick rundown:
- Cash flow statement: This is a straightforward statement that summarizes the inflow and outflow of the cash within your business’ over a specific period, and it can be used to get a good snapshot of your business’s overall financial health.
- Balance sheet: This is a financial statement that you can use for an overview of your assets (cash and investments), liabilities (financial obligations or debts) and equity (ownership or stake in the business) at a specific moment in time. It can help you get a feel for how well your business is doing financially and track your company’s net worth.
- Tax returns checklist: This type of checklist can be helpful because it tells you all the receipts and other paper trail items you’ll need to gather for when you file your taxes.
- Accounts payable/accounts receivable: Accounts payable refers to money you owe others, while accounts receivable means money that others need to pay you. Both are essential to understand, so you always know what you owe and what is owed to you—and by when.
Everything you do has an impact on your profitability and your future potential to grow.
We have some helpful templates you can use to build a balance sheet, create invoices and even get ready for tax season.
Download templates to get started
In addition to knowing what you need to file your federal taxes, be sure to check on what's required to file them at the provincial level.
3. Streamlining payments operations
Now that you know what you need to keep track of your money, it’s time to put it into action.
There are twenty-four hours in a day and one million things you need to make happen (including eating and sleeping). Knowing how you spend your time helps you get real about where you could be a little more productive. Plus, it can help you optimize your workflow, boost your efficiency and—wait for it…accomplish more in less time. Operationalizing payments are often a pain point that can slow you down… so make time to streamline.
The small stuff
It’s best to handle every bill and invoice and update your records right away. But we know it’s not always realistic. Carve out time each week to manage your money in and money out. This way you set yourself up for a successful end of month when it’s critical to know where you stand heading into the next month.
The big stuff
Map out key milestones in your calendar for yourself. For example:
- Sales targets (annually, quarterly, monthly, weekly). These numbers aren’t set in stone. They are numbers to help keep you working towards a goal.
- Important financial dates (tax season)
- Keep note of trends affecting your business (Does seasonality affect your income? Are you performing better during certain times?)
Why choose Interac solutions
- Simple and easy checkout for your customers
- Pay and get paid — fast
- Low fees
- Good funds and no chargebacks
- Ability to offer fast payment options from anywhere
4. How Interac helps
The key to being in charge of your business is already in your pocket. With Interac, you can experience the same simple, secure and convenient solutions in your business as you do in your day-to-day life —and offer your customers payment choices they know and trust.
Interac helps in other ways, too:
Eliminates the need for cash or cheques
Gives customers more ways to pay
Whether you’re selling out of your home or at booths, tables and markets across the country, you can accommodate customers who don’t carry cash by accepting Interac Debit contactless payments. With both stationary and mobile terminals available through an acquirer, your customers will be able to instantly pay using their own funds, with a simple contactless payment.
Provides a fast and secure way to exchange money
Interac e-Transfer is secured by a robust set of security measures and fraud controls. And by reducing your business’ reliance on cheques and other physical forms of payment, it can help you reduce counterfeit risk and prevent fraud.
Helps reduce worries about email fraud
By setting up Interac e-Transfer Autodeposit, you are protected by multiple layers of security and can even skip the need for security questions. Autodeposit follows routine fraud checks by your financial institution, without any additional steps.
Makes it easy to track the comings and goings of your money
With Interac e-Transfer, you can keep track of your spending by using the Interac e-Transfer memo field and pay and get paid in near real-time, with no guesswork on when the transaction will occur.
Removes the awkwardness of asking for payment
With Interac e-Transfer Request Money in just a few steps, you can send a request for payment off to whoever owes you money. This feature will also automatically send follow-up reminders if needed.
Keeps you and your client’s records in check
The Request Money feature can also help you streamline your accounting processes by including an invoice number and due date in the comments field of the request, saving you the hassle of scrambling to find the information in your records.
This article offers general information only and is not intended as financial, legal or other professional advice. While information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subject matter discussed. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Interac Corp.