In the year 2020, the United States saw over 4 million applications for new businesses. That's more than the entire population of Los Angeles. If you're one of those new entrepreneurs, or a small business owner gearing up to modernize and compete, you need to know how to handle payments.
Understanding invoices, vendor bills, and customer payments can be daunting—but getting it wrong could result in countless (unnecessary) fees for you and your business. Luckily, by the end of this 5-minute guide, you'll know exactly why bank transfers are the best solution, and how to leverage them for free.
Ready to start? Let's go.
Business owners who are billing customers or receiving invoices from vendors should use bank transfers instead of peer-to-peer payments whenever possible. A bank to bank transfer (sometimes known as wire transfer) is the superior choice for a few reasons:
Western Union is one of the oldest money transfer companies in the world. Since the 1800s, the company has helped people send money all around the world. Unfortunately, you might have to incur some hefty transfer fees. For a $100 transfer to a US recipient's bank account, Western Union charges:
A 99 cent bank transfer fee might not seem like a whole lot, but it comes at a different cost: service time can take up to 5 days. And let’s not even get started on international transfers.
Zelle does bank account transfers quickly, and they're already partnered with most banks and credit unions in the United States. Since it's already ingrained into so many mobile banking services, recipients don't have to worry about downloading a new app.
However, Zelle isn't designed for sales and purchases. As a business, if one of your transactions gets lost in the wind (disrupted, sent to the wrong recipient, etc.), you may not be able to recover it. Moreover, transaction limits cap out at $2,500: for more expensive business purchases, that may not be enough.
PayPal is one of the most popular methods of sending money online. Unlike other P2P payment services, PayPal also accommodates for business to business (B2B) money transfers. They also allow transfer maximums that are upwards of $10,000+.
However, they're also not without their costs: For US transfers, a credit or debit card will cost you 2.9%, and for bank account-funded international transfers, up to 5%.
Unlike those other services, ZenBill makes it easy for businesses to pay their vendors and get paid themselves.
Even better, ZenBill's AI lets you avoid late fees and save time by digitizing your invoices, and it integrates seamlessly with your business' QuickBooks or Xero account.
That way you can focus on what's really important to you: your business.
Let's quickly recap:
With that all covered, you're ready to pay and get paid!