As a business owner, you know how critical cash flow is.

To grow, you need to meet payroll demands, purchase inventory, pay your bills, and maintain momentum.

Although next-day funding is the norm, same-day funding options exist. This can have a significant effect on your daily business operations and decisions.

According to the Electronic Payments Survey Report from the Association for Financial Professionals, over 60% of those surveyed said that faster payments would have a positive impact on their organization, particularly when looking at B2B transactions.

If you seek same-day funding, you’re in luck. Here’s what you need to know about the benefits of quicker processing times, as well as what the National Merchants Association (NMA) can do for you!

What Is Same-Day Merchant Funding and Why Does It Matter?

When a customer processes a purchase online or swipes their card in-store, a lot happens behind the scenes before you see that dollar amount in your bank account. Money is moved from the customer’s bank (the issuing bank) to your bank (the acquiring bank). How quickly these funds move from one account to another depends on many factors.

In some cases, you can receive payments on the same day. However, to avoid steep fees, the timeline is generally between two to five days with the traditional industry standard tends to be two business days. It all depends on who you partner with for your merchant services. Some payment processing companies will front you that money, but this service will typically cost you an additional fee.

That is why it’s critical you do your research when choosing how your payments will be processed and by who. Seek a merchant services provider who offers same-day funding, remaining mindful of what that will cost you.

Learn more about the National Merchants Association difference.

If you’re a small business owner and are looking at faster payments as the way forward, you’re not alone. Although businesses with fewer than 500 employees account for nearly 50% of American jobs, they are financially fragile. Most have little cash on hand to address even the smallest setbacks. Faster payments can help address some of the daily challenges small businesses face.

The Automated Clearing House (ACH) and Same-Day Payment Processing

Technology continues to evolve and is leading to new opportunities every day.

As a business owner, the key is to match reliable technology with service partners you trust. Once you get this formula right, your business can take off — which we discuss in greater detail below.

One of the major changes that occurred within the business world was the improvements made in 2016. The Automated Clearing House (ACH) financial system, which is the backbone for payment processing within the U.S., transitioned to the possibility of same-day payment options. These improvements were made across three phases based on a wide range of benefits for small business owners.

ACH transfers are the evolution of the paper check system that consumers and businesses once relied on. Of course, the fundamental difference (and advantage) of ACH is processing time. Following the changes made in 2016, funds could be received even faster because additional ACH batches were added to the daily schedule. This enabled funds to be sent and received on the same day.

Here’s why taking a step towards same-day funding is so beneficial.

1. You’ll Get Your Money Sooner

This may seem obvious, but it’s the bigger picture here that matters.

The cash flow you can rely on will significantly influence business operations. This is especially important to small business owners who rely on a steady income stream to achieve sustained growth.

Whether you need to settle emergency payroll issues or are seeking an immediate investment, having access to money the day you make it will provide you with the peace of mind and flexibility you need to thrive. Faster payment processing options will also lead to more predictable budgeting and spending so that you can avoid expensive short-term financing.

2. Increases Your Level of Control

If an opportunity comes up in business, but you do not have any money, your hands are tied.

Conducting business in this manner can be highly stressful and unproductive.

When you receive your funds quickly, and on time, this will allow you to expand at the right time. That is because you can rely on this funding more than accounts receivable. The money your customers or partners owe you is just that — account receivable. Meaning, for every dollar that is not in your possession is one less cash dollar.

Of course, regardless of when you receive your money, you’ll need to make informed decisions in terms of your cash flow, managing your money effectively. Sadly, up to 82% of business failures are because of poor cash management. Stay in control, taking advantage of your company’s cash flow without spending it frivolously.

3. Quick Money Can Help Protect Business Relationships

All business owners face tough times, but 2020 was particularly hard for small, local businesses.

If you need to pay your suppliers, same-day funding can ensure your invoices are paid on time. For example, you may need to pay a partner to protect your reputation and business relationship. To ensure you have enough, you plan a special event online or in-store. The goal is to attract more consumers and boost sales to have the finances available you need.

Knowing that your sales will be in your account the same day makes the extra effort well worth it.

Keep this pattern up, and you may be able to negotiate better terms, benefiting from early-pay discounts. This can support your bottom line when you frequently purchase select items.

4. Leads to Greater Investment Opportunities

Working capital is imperative when seeking investment opportunities. Depending on your industry and business model, the type of investments will vary — but the need for cash flow remains the same across all businesses. It’s estimated that if small businesses never had to wait for payments, they would hold an average of almost 43% in additional working capital. Sadly, because of cash flow restrictions, one in seven businesses cannot take on new work. For some, this lost work could be a lost investment.

NMA Is Here to Help

When you receive faster payments, this can lead to more innovative practices that will allow you to rise above your competitors.

Since 2004, NMA has been a trusted partner and advocate in merchant services. We remain dedicated to eliminating the unreasonable and unnecessary fees that weigh so heavily on your small business. The unique, personalized experience is unlike anything else in the market. That is why NMA is recognized as both a merchant services provider and partner in business development.

As we say at NMA, “We Work For You™” — and we’re proud of that commitment. NMA is the only company in the industry to offer same-day zero-cost processing.Have questions? NMA is here for you. Contact us today!