Next-day funding is a merchant service some payment processors offer to trusted merchants. This waives the standard holds that generally hold up funds for as many as three business days on each and every batch. If you’re currently facing multi-day holds, you’re likely familiar with the frustration they can cause. Beyond frustration, there are serious costs associated with funding holds and moving to a merchant account with next-day funding has the potential to offer your business some significant financial benefits. The following represent just five of the many positive impacts next-day funds stand to have on your business, including improved cash flow, the ability to look further into the future, the satisfaction of knowing the money you’ve earned is working for you, and more.
Next-Day Funds Maximize Cash Flow
Cash flow is one of the most important – if not the most important – measures of a company’s health because strong cash flow ensures a business can always meet its obligations. Profit is great, but if that on-paper profit is tied up in accounts receivable, it’s meaningless when expenses like debt payments and payroll come due or major capital projects pop up unexpectedly.
Next-day funds won’t reduce your accounts receivable, but they will ensure that funding holds don’t compound the problem, and that your money will be available in your bank account as quickly as possible. The impact that has on cash flow and liquidity can’t be overstated, making next-day funding an incredibly valuable service for merchants looking to maximize their financial health and flexibility.
Next-Day Funds Eliminate Weekend Bottlenecks
A two or three-day funding hold might not sound like a big deal, but consider how those holds impact transactions done late on a Friday and over the weekend. Holds are measured in business days, which means sales that come in after the cutoff on a Friday might not be available until the following Wednesday or Thursday. That kind of hold ballooning is, at best, a huge inconvenience for weekend-heavy businesses like bars and entertainment venues. At worst, it’s a disaster waiting to happen.
Next-day funding ensures that merchants doing heavy weekend sales will always have their money available by Monday morning at the latest – a potential difference-maker, especially during times of economic turmoil.
Next-Day Funds Enable Improved Forecasting and Planning
A business uncertain of their day-to-day finances can have a hard time planning for the days and weeks ahead, let alone for major future expenditures or growth initiatives. If your payroll is up in the air, everything else falls by the wayside by necessity.
Next-day funds ensure that day-to-day expenses can be put on autopilot as much as possible so that owners and managers can shift their focus further into the future. That ability to steer the ship with a view to the horizon rather than obstacles straight ahead is invaluable when it comes to developing businesses that can free their owners from constant oversight while establishing stable and sustainable long-term growth.
Next-Day Funding Gets Your Money Working for You
There are good reasons payment processors impose funding holds, all revolving around minimizing the risk associated with potential fraud. But regardless of how good the reasons may be, the fact remains that every day your money sits in your processor’s accounts is a day that it isn’t earning interest or shoring up your investments.
Next-day funding ensures that your money can work as efficiently as possible rather than sitting in limbo. That’s a big deal for large merchants running multiple-locations or nationwide chains, but even if you’re a small merchant and the difference is only measured in the hundreds of dollars per year, it’s still your money.
Next-Day Funds Provide Additional Peace of Mind
In the end, next-day funding is all about peace of mind. Money in the bank represents a safety net, and the faster the proceeds from your sales hit your account, the larger that safety net is. That makes next-day funding an easy choice. If you’re not already benefiting from it, now is a great time to look for a merchant services provider that can change that.
To find out more about BAMS next-day funding, the full suite of value-added services we offer to our merchants, and our industry-best pricing, submit your quote request to get started on your custom five-point price comparison today!