Alternate title for this post: “So the check does not need to be in the mail.”

Today I will share a low-cost tool that helps consulting clients pay more quickly. This can help you get paid faster, which increases cashflow and makes your business less risky.

The Good

I think Eliza introduced me to Intuit Payment Network (IPN).

IPN charges $0.50 (fifty cents) per payment that is sent on their system. The nice thing is that this is done electronically, and payments generally show up in your bank account within a day of being sent.

I find the flat cost to be preferable to other payment solutions which take a percentage of the payment. For example, if you have a $2500 payment that goes through a payment processor that charges 1% per transaction, it would cost $25 to send that payment. I think one percent is on the low end of transaction costs, so it seems desirable to use the fixed cost.

A system like this is nice because it happens mostly automatically on my part. I create an invoice in Harvest (my preferred time tracking software [affiliate link]) and email it, and then follow up with an IPN request for that amount. I can schedule when payments should be made, and send reminders if they are not paid on time.

Some options that are there but that I have not used yet:

• sending money
• accepting credit card payments for 3.5%

The Bad

While there are some good reasons to use IPN to collect payments from clients, there are some limitations that I have found.

The most annoying was that it was tough to get receiving rate limit increases. The beginning receiving rates are probably fine for some businesses, but collecting payments for consulting will quickly exceed either your daily or monthly limits, no matter how much you slice it.

On IPN, daily limits are half of what your monthly limits are. When I first started out, I think the monthly payments were limited to $5000, and so my daily limits were $2500. This quickly ends up being unusable, since I fairly quickly receive payments that are greater than the daily limit, and the monthly limit means that I can’t break up the payments into smaller chunks to get around the low daily limit.

I contacted IPN to try to raise my limits. They put me through a fairly opaque limit raising operation. I sent them three months of bank statements and then they just said that the request was denied. I tried again soon after, with the same result. Then I just kind of punted on it for a while and just took paper checks.

When I tried the next time and related my previous experiences and desire to use their system, I was told that it was mostly their fraud department wanting to ensure that I had enough cash in that account to cover any fraudulent payments. After I understood this (and had a little more money in the bank), I was able to increase the rate to $25000 monthly / $12500 daily. This gives enough breathing room to receive large payments, and potentially to have multiple clients use this method. If I get close to the limit again (a fantastic problem to have), I would petition for another increase, set up another (possibly complementary) method, or ask for a one-off check payment or wire transfer.

So, not entirely smooth sailing, but that has been the only issue I’ve had so far. I am guessing that my requirements are different from many other small businesses?

Your thoughts?

Am I missing a simpler solution that does not cost much to implement? What are you currently using for getting invoices paid? What does the process look like on your end?