After Sales and Support, You Also Need to Focus on Settlement Issues

The entrepreneurial spirit is alive and well in America today, especially in our college dorm rooms across the nation.  Young aspiring businessmen and women are rife with bright ideas to amass quick fortunes, limited only by their imaginations and lack of real time business experience.  Energy and passion can often make up for a challenging learning curve that must be absorbed, but there is one area of commerce that can be easily misunderstood on the front end when startup activities are fast and furious.

“Sales” and “Support” may consume most of one’s attention during the important early development phase of an enterprise.  If investment capital was not an initial concern, then the “Settlement”, the third ‘S” in the trilogy, of ongoing accounts receivable will most likely require more time than you may be willing to devote to the process.  It is difficult enough to obtain clients and provide a service or product, but when those clients take their time paying you, an unexpected working capital shortfall can materialize overnight.

One’s first inclination would be to visit your local banker for assistance in collecting overdue invoices, but banks got out of the factoring game long ago.  Private factoring companies tend to charge outrageous fees for their services, but do not leave your bank’s office just yet.  Banks or their agents on Internet websites will help you in the payments arena with settlement solutions that will convince you that “Cash is King”.

Collecting electronic payments at the point of sale has gone through enormous changes over the past fifty years.  It was originally designed to replace a businessman having to extend credit to customers to encourage sales at his establishment.  Today you do not need a “brick-and-mortar” store, and today’s payment methods can travel with you on the road, all made possible by plastic payment cards.

There are three different cards, based on the demographics of our society – a credit card for creditworthy consumers; a debit card for creditworthy consumers that prefer to pay in cash; and a prepaid card for those without a bank account and without good credit.  The general population breaks down roughly in thirds for each category, and the bank will provide you with merchant services to collect immediately from anyone of them.

“Wireless” terminals may be the way you will want to go, since your collection device can travel with you and operate on batteries, while authorizing a card transaction and printing a customer receipt.  Cash funds will be deposited in your merchant account each evening, allowing for a good night’s sleep free from worrying about a pile of unpaid accounts.  Yes, there is a fee for the service.  Nothing is free in today’s economy, but the charges are nominal.  Comparison shop for the best deal with a safe and secure banking partner.

Settlement solutions can solve many of your early working capital problems, as long as you invest the time to acquire one that meets the demands of your business model.


Tom Cleveland is a writer for  He has over 30 years of experience in executive management, corporate governance and business development.  Tom served as CFO for various Visa International entities from 1980 until his retirement in 1999 and was instrumental in expanding the global reach of the Visa system.  Tom’s writing on business issues has appeared in the NY Daily News and Business Insider among others.

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