Why Accountants Should Understand Payment Processors
Accountants are the backbone of any business as they handle most of the financial tasks for a business. But now that technologies have advanced, what new thing should they learn? They can start with payment processors, but what are they?
According to an article “A payment processor is a company or service that facilitates electronic transactions – such as payments made with credit cards, debit cards or digital wallets – between businesses and their customers.”(stripe: Payment processors 101: what they are and how they work.)
In this article, I’ll mention why accountants should understand payment processors. It’s an informatic write-up, so be attentive and read carefully.
Financial Reporting
Payment processors are used for recording transactions. It makes looking into financial records easier than going through all the books. Accountants can gain valuable insights into the cash flow of the clients, trending patterns can be easily defined and budgeting will be easier.
This is why choosing a payment processor that is accurate and robust is important. If you want to be ahead in modern accounting, you would have to master how it documents transitions and how the processor works.
Risk Management
In this modern era, fraud detection is mostly digital, unlike the old times when accountants used to identify and look for unusual transactions. You must know about schemes like fraudulent transactions or chargebacks.
To become a better accountant, having deep knowledge of how payment processors spot frauds is a must. Understand the algorithm so you can easily detect whether the transaction is fraudulent or not.
Besides, if you are good at it your image will come out as a reliable individual, so if you will go anywhere for a job there is a high chance that you will get it.
Tax Preparation
Tax returns could easily be filed with the help of payment processors. Instead of recording everything in a ledger, they can put everything here and at the end of the year or time of filing tax use the information for accurate taxation.
If you are familiar with it, you’ll be able to handle tasks for your clients easily but know one thing there are different types of processors. Some might allow you to search in their apps, or others will give you downloadable statements.
Make sure to aware your clients aware that they use these systems for personal transactions, as it can mess up with tax filing later.
Cost Management
Payment processors are usually not free of cost. You are met with various fees charged by the payment processors like processing fees, monthly fees, or transaction fees. But they are usually negligible, making them easily affordable.
But whether you want it for personal use or your client, compare prices of numerous software and find the suitable one for you that meets all your needs and requirements. You can reach out to them via their websites and look at the prices.
Other things should also be taken into consideration like customer support, reviews of past users, reliability, and overall quality. Check everything and then make the final decision.
Client Experience
You are an accountant, and you must give your client the best possible experience. Your interaction has to leave a positive image on them so that they can feel they made the right choice by hiring you.
Proper knowledge of payment processors is important so that you can explain in depth why the recruiter needs to go for it, stating all the pros and cons. On the side, you can also learn various other technologies so that your skill set will expand, and you make better points.
Consider learning about the account payable cycle given in the infographics below, this would showcase you as the ideal contender.
PRO TIP Go to workshops and webinars arranged by payment processor companies. This will keep you updated on their latest features.
Financial Advice
Financial advice should be your strong point as you are an accountant and your clients will ask your questions. Being able to answer everything with accurate advice would play a major role in proving your worth.
Commercial assistance isn’t limited to savings, investment, and taxation. They might ask you specifically what technologies they could incorporate into their business like a payment processor and’ll have to answer it.
These are just a few reasons why consultants need to understand payment processors. There are more, but these are essential once that cant be ignored if you want to be highlighted as the best.
