Among the many smart business accounting practices that can help your business is that of using an off shore merchant account for your credit card processing needs. These offshore accounts are completely legal and can help your business save money. They also provide service levels comparable or often even better than their on shore counterparts.
Credit card processing ability is an almost necessary part of business today, even for many small businesses. This is because so many people prefer to pay with credit or debit cards instead of cash or check. If you have the ability to process credit and debit cards, then you are engaging in a smart business practice, as it will allow you to serve a wider range of customers.
Once you start accepting debit and credit cards, you will need a merchant account to provide a way to process these transactions and ensure the proper transference of the money from the customers’ accounts into your account. A Merchant account is much like any other bank account that you have opened for your business, except that its main purpose is to facilitate the transfers of credit or debit card transactions. For accounting purposes, merchant accounts should be kept as a separate business account.
There are plenty of companies that help you open a merchant account in the United States, but that is not the only place that you can open an account. There are off shore accounts available from countries in the Caribbean, Central America, and Europe. Using an off shore account to help with your accounting needs as they relate to credit and debit cards is a great way to save money in a variety of ways.
With the merchant account located off shore, the income from your credit and debit card transactions will often count as foreign income. Domestic income is taxed at a higher rate than foreign income. A tax attorney or accountant can help you with the accounting necessities to facilitate this option. Also, by choosing an off shore account, you can always choose to send less of your money to the United States.
Another way that this accounting trick saves you money is by making it possible for you to save money in upfront costs and security fees. Many on shore accounts require quite a bit of money for an opening account and for security reasons, and then keep back a certain amount of money, on top of the original security amount, each month in order to cover charge backs. Initial deposits and holdbacks for charge backs are usually lower with off shore accounts.
Some of the transaction fees associated with off shore accounts are a little bit higher, but that cost is usually more than off set by the savings enjoyed in taxes and in other fees. Additionally, the service is often very good, as these companies are actively trying to gain and maintain clientele.
One of the best accounting moves you can make for your business is to look into off shore merchant accounts to see if they will work for you.
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Trevor Tootle is the owner and operator of F accounting, the best place on the internet for information about accounting, For questions or comments about this article why not visit: www.rmaccounting.com/articles
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