If you’re a small business owner that works mostly online, you know that Paypal transaction fees can add up. But PayPal is one of the biggest and most accepted transaction systems out there and it’s pretty hard to avoid them. But there are a few ways that you can reduce PayPal invoicing fees.
What are PayPal fees?
PayPal is a great system that has truly revolutionized our ability to work online. We can create something from the comfort of our own home and sell it to someone across the world, using only online systems. And, we have those online transaction systems because of PayPal’s innovative creation.
But systems like PayPal come with fees. When you bill someone using their platform, you have to pay a transaction fee. If you are in the U.S., it is a fee of 3.7% plus $0.30 USD on each transaction.
How to Reduce PayPal Invoice Fees
When you have small transactions, this fee doesn’t seem like much. But the bigger the transactions, the bigger the fee.
#1. Accept Another Method Of Payment
Let’s be honest, PayPal fees are kind of pricey and, if you’re smart about it, you can find cheaper ways to receive payments from customers. In fact, if you’re looking to eliminate fees altogether, you might want to consider accepting bank transfers.
While bank transfers can take a few days to process depending on how you accept them, there is no fee associated with it. The downside to this is that you will likely have to manually record the payment within your accounting system.
#2. Invoice Less Often
Invoicing on a more frequent basis might be more favorable to you as a business owner because then you have money in your account more often. But if you’re trying to reduce Paypal invoicing fees then you might want to consider reducing when you get paid.
While $0.30 doesn’t seem like a lot if you’re getting paid weekly from a client that’s over $15 per year. If you have that same setup with 10 clients, you’re looking at upwards of $150. It adds up. Consider reducing fees by accepting payment less often.
#3. Claim Your Fees on Your Tax Return
It might surprise you to learn that your PayPal fees are tax-deductible. While this isn’t necessarily a way to reduce PayPal invoicing fees overall, it is a way to reduce their overall impact on your books.
#4. Build PayPal Fees Into Your Pricing
Again with this method, you’re not getting rid of them altogether, but you are reducing the impact of fees by building them right into your pricing. This way, while you are covering them, you don’t have to deal with them directly as you already have the costs to pay for them.
#5. Use the No Fee Transfer
PayPal allows you to transfer money from PayPal to your bank account instantly for a specific fee, or you can do it at no cost by waiting a few days. Choose the no-cost method if you want to reduce PayPal invoicing fees. Just make sure you plan your cash flow accordingly.
Looking for More Ways to Save Money?
- 20 Things People Waste Money On
- Crazy Things People Do To Save Money
- Stay On Top Of Small Business Finances With These Tips