Small Business Tips 7

Woman working in restaurant taking payment from customerHow a Payment Policy Can Help Your Business

A uniform payment policy keeps customers and employees on the same page and improves cash flow management. You may use your payment policy to spell out accepted methods of payment and accounting practices. If your business extends credit to customers or sells a subscription or membership service, you should clearly define the expectations for payment as well as the consequences for failing to make payment. If you need assistance with your business’s payment policy call your LegalShield provider law firm.

  • Cash – While cash is the easiest method of payment to accept, it does present some security and record keeping concerns for small business owners. If your business receives cash payments you should implement cash handling and sales receipt policies. Train managers and employees on how to follow the policies. Good accounting and cash handling procedures will limit theft and fraud. Always use counterfeit detection pens for larger bills and make frequent bank deposits to avoid keeping large sums of cash on premises.
  • Personal Checks – While the popularity of personal checks has waned in recent years, some customers may still insist on paying by check. Only accept personal checks from local banks. Do not accept temporary, non-personalized or undated checks. Never give cash back on checks written in excess of the purchase amount. Confirm the identity of customers who pay by check. Review their driver’s license or other official ID and collect personal information, including an address and telephone number. It is important to review these procedures with your employees and keep a written copy of the policy at checkout.
  • Returned Checks – If your business frequently receives payment via personal check you may consider using a check scanning service. Check scanning services help spot stolen and forged checks and identify individuals who have been flagged for writing bad checks in the past. The rules for collecting on bad checks vary from state to state; call your LegalShield provider law firm to learn more about the laws where you do business.
  • Credit and Debit Cards – With payment systems now integrated into smart phones and tablets, accepting credit and debit cards has never been easier. There are fees and regulations associated with the payment card industry (PCI). When looking for a merchant services vendor it is important to examine the costs and terms of your agreement. Most vendors charge per-use fees that may be flat or percentage based. It is important to carefully calculate how those fees will affect your bottom line. In addition, if you store, process or transmit customer payment information, your business may need to be PCI compliant. While PCI compliance is not federally mandated, some merchant services vendors require compliance and several states have enacted laws with requirements similar to those of the PCI Security Standards Council. Visit to learn more about PCI compliance standards and talk to your LegalShield attorney about the laws where you do business.
  • Invoicing and Credit – In some industries, such as business-to-business sales and manufacturing, it is common practice to bill customers for products or services after they have been provided. It is vital to examine the risks of extending credit to customers and develop a firm payment policy that each customer reviews and signs. Your policy should spell out the time frame for payment and any potential late fees or interest. Talk to your LegalShield provider law firm about the legal options available for collection in the states where you do business.
  • Membership Sales and Recurring Payment – Some businesses, such as gyms, art studios and private clubs, rely primarily on monthly memberships or recurring payments. It is important to begin each membership with a signed membership agreement. Your agreement should spell out the terms and benefits of membership, price and method of payment, due date and penalties for delinquency. Your LegalShield provider law firm can help review your membership agreement to ensure it is legally sound. Call your LegalShield provider law firm today to learn more.

Physiotherapist With Patient In RehabilitationIs Your Business Workers’ Compensation Compliant?

Workers’ compensation insurance covers the cost of medical treatment, rehabilitation and lost wages when an employee is injured on the job. Most states require employers to purchase workers’ compensation coverage. Understanding and complying with your state’s regulations will help protect your business. If you have questions call your LegalShield provider law firm and speak with an attorney.

Prior to the development of workers’ compensation insurance, disputes between injured employees and their employers often resulted in expensive and time-consuming litigation. Frequently both sides battled in court trying to prove the other side was at fault. Injured workers were unable to pay medical bills or provide for their families while employers were stuck with expensive legal bills and settlements. Workers’ compensation insurance is a no fault system designed to provide injured employees with necessary compensation and avoid lawsuits.

Each state sets its own workers’ compensation regulations. The cost and scope of the plans vary greatly. States may set thresholds for the number of employees a business can have before workers’ compensation insurance is required. Some states allow sole-proprietors, partnerships and certain family businesses to opt out. If your business is eligible to opt out of workers’ compensation insurance, it is important that you understand the risks and liabilities you may face if an employee is injured.

You are responsible for understanding the workers’ compensation requirements in any states where you have employees. Visit the US Department of Labor website for a list of state workers’ compensation offices. If you have questions or need additional information call your LegalShield provider law firm.

Smiling satisfied businessman workingUnderstanding the Better Business Bureau

Consumers and business owners frequently misunderstand the Better Business Bureau (BBB). Some consumers believe the BBB is a government agency. Business owners may be confused by BBB’s accreditation and rating systems. This article includes some important information to help clarify the role of the BBB.

  • The BBB is not a government agency. The BBB is a non-profit organization made up of 112 independent local organizations throughout the U.S. and Canada. Each affiliate collects dues from local businesses. Those dues are used to support the BBB’s mission.
  • The BBB’s stated mission is to advance trust in the marketplace. The BBB provides information to consumers on scams and health and safety issues in the marketplace. They also provide businesses with information on ethical business practices and dispute resolution.
  • The BBB grades businesses from A-F. The BBB provides a list of factors that make up the grade via their website. These include complaint history, type of business, number of years operating, government actions against the business and several other factors. The number of complaints received and whether the business responds to those complaints determines a sizeable portion of the BBB grade.
  • The BBB provides accreditation to businesses that meet certain standards and pay yearly dues to support their local affiliate. Some consumers believe that a lack of accreditation reflects poorly on the business. The BBB states that, “accreditation does not mean that the business’ products or services have been evaluated or endorsed by BBB, or that BBB has made a determination as to the business’ product quality or competency in performing services.”
  • Your business should never have to pay for a good rating. In 2013 the BBB expelled an affiliate in the Los Angeles area for a pay-to-play scandal. The affiliate was providing “A” ratings to businesses that paid their annual fee without any regard for actual credentials or standards. Ratings should not be based on accreditation. If you have been asked to pay for a “good rating” contact the Council of Better Business Bureaus to report the affiliate and call your LegalShield provider law firm.
  • Customers can make formal complaints through the BBB. Complaints are sent to the business, which is asked to respond within 30 days. If you respond to the complaint the case will be closed. The best way to avoid complaints negatively impacting your grade is to respond to complaints within the 30-day time frame. Failure to respond is noted in your BBB profile and will negatively affect your grade. You may dispute a customer’s complaint. If a complaint is disputed the customer will be given contact information for a government agency that may help resolve the matter. Learn more about the BBB complaint process here.