Over half of all customers on our site end up paying for their jobs with cash in hand. Some businesses love this because it helps get around income tax and GST payments. But aside from being illegal, taking cash in hand is a bad idea for four other reasons.
1. It’s hard to measure sales.
You can’t manage what you can’t measure. If you take cash without issuing a receipt, you’re not tracking your sales accurately enough. Without having an understanding of sales, it’s harder to set goals; it’s harder to manage expenses; it’s harder to work out the value of your marketing or which customers are profitable to you.
2. You expose yourself to theft.
If you have staff taking cash payments, chances are some portion is going straight into their pockets.
3. You’re devaluing your business.
The value of a business usually depends on sales and profit stated in your accounts (what you actually make in cash is irrelevant). If you don’t track tracking sales properly in your accounts and want to sell your business, buyers will undervalue it.
4. It can make it harder to get credit.
When you try for a loan, your finance broker or bank will ask for evidence of your business income — a tax return, a company P&L statement & Balance Sheet, or bank accounts. If your accounts don’t include all sales because some are in cash, this can prevent you from getting credit.
Try ServiceSeeking.com.au’s Online Payments today to ensure secure transactions!