If you’ve ever noticed when using an online payment platform like PayPal that you’re often losing a few cents or even a few dollars off your invoices, then you’re not alone. A large majority of Australian and global payment platforms skim a few percentage points off our invoices in the form of invoicing fees.
These fees aren’t a big problem if you only use PayPal or a payment platform once or twice a year for online shopping on eBay, but, if your business relies on PayPal payments you could be losing hundreds or even thousands of dollars a year.
In this article, we’ll take a look at a few popular payment platforms and how to avoid their invoicing fees.
Opt For Domestic Bank Transfers
For businesses or everyday Aussies using invoicing software, it’s best to make use of their bank transfers option before their built-in invoicing platforms. You’ll find that on services like QuickBooks Online there are no-fee options when using bank transfers and thanks to recent bank process changes, like Osko, bank transfers can be fulfilled just as quickly as payment platforms.
Credit cards, however, will always have different rules. Accepting credit card payments incur a small fee, so the free bank transfer option is a way to motivate customers and clients to use the free option rather than lose up to 2.9% on credit card fees.
Wire Transfers for International Clients
When there are international invoices brought into the equation, it might be better to consider wire transfers. For transfers to and from Australia, there are different fee structures. However, wire transfers are often faster and don’t have any invoicing fees, which is perfect for larger invoices.
You can expect wire transfers to cost around $30 to $50, which isn’t so bad considering a $1,000 invoice through PayPal could see almost $30 wiped off for a service that has more steps and could be a lot slower.
There is one more thing to keep in mind though, and it’s that clients will be the ones who need to fit the bill for a wire transfer, so they may either ask you to cut $30 off your invoice. A small few banks and financial service businesses do however offer free wire transfers to Australia, which works out as a win-win for everyone involved.
Consider Being Paid Less Often
A quick workaround for avoiding invoicing fees is just to be paid less. If you primarily use PayPal for all of your invoicing, then it’s a good idea to ask your clients to pay you less frequently.
This is down to the fact that PayPal charges more than just a percentage fee, but also dollar fees for every transaction. Each time you have an invoice paid, PayPal absorbs 2.6% along with a $0.30 fee.
We recommend that you request to have invoices paid less often and at a maximum of once a week – or just send them out less often.
Create & Send Invoices Yourself
One of the easiest ways to bypass all types of fees or even an invoicing service altogether is by simply drafting your own invoices and sending them yourself via email to your clients. Both Numbers on macOS and Excel on Windows have invoice templates which make drafting up invoices super simple. Fill out your details, add each service item and price with the total and save it as a PDF and send it off.
It’s a good idea to save your customised invoice template so that it’s easy to go back and make changes or create a new one each month. Also, remember not to forget to add your bank’s BSB and Account number or your clients will have nowhere to pay the invoice to.
Find a No-fee Platform
Finally, if you’re lucky enough to have customers, clients or contractors who are happy to use no-fee platforms for invoicing, then you’ll be able to avoid invoicing frees altogether. Take a look at invoicing and accounting web apps like Wave where you’ll find that, unless you need credit card processing, the entire program is completely free.
Many of these platforms give you the ability to send invoices, receive them and pay all in one without seeing any dollar percentage, no matter how small, being removed from your final payment amount. Wave touts their ‘No set-up fees, no hidden charges, no monthly fee’ service for small businesses so you can be sure you’re not going to be hit by any sort of fees on their platform.