The holiday season is nearly here, and for retail shops, that means busier than usual trading days. As you gear up for the summer sales rush, it's essential to be aware of potential delays in settlement dates over the public holidays.
What are Settlement Dates?
Whenever a customer pays with a credit or debit card, the funds from those transactions don't land in your bank account immediately. Usually, we see a 1-3 day delay, the settlement period, which is the period it takes for the banks to finalise the transactions before releasing your funds.
The time it takes to hit your bank depends on how many steps the funds take to flow. Today, with the least call routing in place, it is likely that two almost identical payments going through at the same time will hit your bank at different times.
What is happening due to public holidays is that your funds are delayed because one step is delayed. This happened recently to people who accepted an American Credit card, and in this settlement period, the thanksgiving day appeared, and their funds were delayed on the USA side.
Why You Should Pay Attention to Settlement Around the Holidays
Due to various public holidays occurring in late December and early January, including Christmas Day, Boxing Day, and New Year's Day, settlement of your daily takings can be delayed by up to 5 days. This is extreme, but it does happen.
For businesses already operating on tight margins, these longer-than-normal settlement times can cause havoc with managing cash flow. Plus, as these delays are often unknown, it makes it hard to accurately forecast cash flow, which is essential for keeping a business afloat.
Tips to Manage Settlement Delays This Holiday Season
Here are some handy hints for retail shops to minimize business disruptions from settlement delays over the holidays:
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Plan - Contact your provider to get a feel of what will happen. Do not count too much on them, knowing they are only one step in the chain.
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Budget carefully - to cover unexpected delays in accessing your daily takings. Do not count on monies on the way.
By understanding settlement dates and planning appropriately this holiday season, small retail businesses can avoid being caught short and keep their sales momentum strong.
Streamline Success This Holiday Season
Managing the intricacies of settlement dates, cash flow delays, and inventory needs during the hectic holiday rush is hard enough for small retailers. Don't let outdated point-of-sale limitations make it more challenging.
The right POS solution, tailored for small retail businesses, can seamlessly handle all your transactions, payments, supply orders, and accounting in one integrated system. This means more efficiency, less wasted time, and complete control - even when settlement schedules are disrupted.
At POS Solutions, we understand the modern retailer because we’ve been in your shoes. That’s why thousands of businesses trust our POS platform and EFTPOS and Credit integrations. Our retail experts will help you.
