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Independent Contractor! PayPal Provides Instant Business Working Capital Finance

If you’re an independent contractor you’re a business owner

EzyLearn can help your business train WHS staff or provide credentialing and inductions.
EzyLearn can help your business train WHS staff or provide credentialing and inductions.

As an independent contractor, operating with an ABN, you’re effectively running your own small business (so working capital important), and that means you’re subject to some of the same reporting obligations for the ATO as other small businesses are. The only real difference is that as an independent contractor, your business model is a lot simpler to other ones.

For example, most independent contractors operate as sole traders, so while they have to withhold their own tax and manage their own superannuation contributions, they still pay the same rate of tax as an individual (or an employee) does, making them eligible to claim the tax free threshold, among other things.

But unlike an employee, an independent contractor has to bill their clients by issuing them with an invoice, and the simplest way to do that is to use a cloud-based accounting software. With the recent announcement that PayPal and QuickBooks had joined forces to offer low-cost cloud accounting software which allows businesses to accept PayPal payments, I’d say QuickBooks is likely to become the independent contractor’s cloud accounting software of choice.

PayPal will Loan Money for Working Capital Based on Cashflow

paypal working capital and intuit quickbooks online accounting softwareOn its own, the PayPal-QuickBooks syncing is a pretty compelling reason for every independent contractor to be using PayPal to accept payments from their clients, but there’s also another, better reason to be using PayPal: PayPal Working Capital.

Working Capital is PayPal’s latest foray into the small business money lending fray – complementing their other ventures, which include merchant services, card readers, and, of course, the QuickBooks deal – by offering business loans to businesses that already use PayPal to process their payment.

The application process is remarkably simple: use PayPal to accept payments, and you can apply for loan of up to 15 percent of the sales processed by PayPal in the last 12 months, up to a maximum of $85,000.

Repayments are made directly from your PayPal account, you decide the rate at which the loan will be repaid – 20 percent of each sale, for example – and are only paid when you are paid. There are no late fees or fees for missed payments, and you don’t pay interest on the loan – just one, simple fixed fee, based on your sales history and the amount you are loaned.

PayPal is selling their Working Capital service as the quick and simple way to grow your business, and it is. Suppose you need a new computer – or a couple of new computers – with a PayPal Working Capital loan, you only pay one fixed fee and you have the money in your PayPal account as soon as your application is approved. So here’s a thought..

Borrow money from Paypal at a fixed cost (not based on interest charges), pay it off from future sales and use it to make a capital purchase for machinery, equipment of a car and claim the cost of that asset purchase this financial year!

PayPal helps make you globally competitive

The real reason every independent contractor should be using PayPal to accept payment from their clients, though, is because it helps to make you globally competitive. With PayPal you can work with clients in different countries, without having to worry about whether they will be able to deposit money into your account, and what fees may be charged to your or your client that make you less competitive than other contractors.

Now that PayPal has inked a deal with QuickBooks, it also makes setting up a PayPal payment gateway and directly your clients to pay you with PayPal incredibly easy – just a few clicks of a button, in fact. This means, your clients can choose whichever payment method to pay your invoices, whether it’s by credit card, debit card or direct from their own PayPal account – so it’s not only easy for them, but quicker too.

And the quicker and easier it is for clients to pay you, the more likely they are to pay you on time, every time. 

You can read more about how PayPal is changing small business in Australia by subscribing to our blog. Alternatively, if you’d like to start your own business as an independent contractor, we’ve recently partnered with the StartUp Academy to help you do just that. Download our free guide to becoming an independent contractor or register your interest in one of the current business opportunities at their website.

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QuickBooks and PayPal Want To Help You Get Paid QUICKER!

Quickbooks is stealthily forming partnerships to fight MYOB and Xero

Quickbooks Online is back and they want to beat MYOB and Xero

Small business owners know better than anyone the difference an an invoice paid on time (or early) can make to their cashflow. Yet, getting paid on time, never mind early, remains as elusive as a pot of gold at the end of a rainbow. A new union between PayPal and QuickBooks Online hopes to change that.

Since PayPal officially divorced from its parent company, eBay, earlier this year, the company has been edging closer and closer to the small business finance market, with products and services specifically aimed at small businesses that derive a good proportion of their business through online sales.

PayPal also seems to be fighting MYOB and Xero

In recent months, Paypal has started offering small business loans to businesses with an existing PayPal sales history, which serves to complement other, already existing services, such as PayPal Invoicing, PayPal’s Merchant Services, the PayPal Here card reader, and now the union with QuickBooks Online.

PayPal Invoicing vs. Quickbooks + PayPal

Item invoicing for free accounting using Paypal invoices, how will MYOB, Xero and Quickbooks Compete with freeIf you already use PayPal to accept payments from your customers, then you’re probably already familiar with PayPal’s invoicing service, which charges a small fee per invoice for the use of its service, rather than a monthly fee like most other accounting and invoicing packages do.

Until recently, PayPal’s invoicing service, as well as its card reader, has been of benefit to businesses that primarily sell goods on e-commerce sites like eBay, and don’t regularly invoice or accept payments in-person. The union with QuickBooks, however, changes that.

Now, businesses that primarily invoice their customers for good and services have access to the best of both worlds: an accounting package that’s inexpensive and the ability to allow customers to pay their invoices in just a few clicks using a credit card, debit card or PayPal.

How QuickBooks + PayPal works

Setting up a PayPal payment gateway within your invoicing or accounting software isn’t new; Zoho has been offering automatic payment gateways – using PayPal, Stripe or any other online payment service – for ages. But the QuickBooks union allows PayPal data to be automatically synced with QuickBooks, reducing all of the data entry associated with accepting payments with PayPal. In essence, it’s bank feeds for PayPal.

With QuickBooks and PayPal, business owners are able to send online invoices to their customers, who can then, with a few clicks of a button, pay them online using a credit card, debit card or PayPal account.

The idea is that businesses will be paid faster, because their customers are able to click a few buttons and pay invoices with greater number of payment methods. Of course, it relies on the customer already having a PayPal account.

What the QuickBooks-PayPal union really means for small business

What the QuickBooks and PayPal alliance really represents, however, is QuickBooks’s continued push into the accounting software market in this country, by aligning itself with a key player in the online payments space, which also happens to be going after small businesses with its own range of small business-centric services.

Currently, there are no other online payment services available in Australia (in the US there are a handful of alternatives, with Stripe being PayPal’s biggest competitor), so the QuickBooks-PayPal alliance gives the former a leg up over already-established competitors in the Australian marketplace, like MYOB and Xero.

Now that accounting software has entered the cloud, the marketplace has become a fairly crowded, cutthroat world, as the recent shuttering of Reach Accounting and the sudden introduction of Reckon One, by the very company that used to licence QuickBooks in Australia, has shown.

For small businesses, the Quickbooks-PayPal union may not mean getting paid faster, but it does represent a promise of continued flexibility in the way small businesses interact with their customers, whether it’s mostly in the form of regular online purchases, casual in-person payments, or mostly by invoicing for goods and services.

What’s your plan for 2016?

As 2015 comes to a close, you’re probably giving a lot of thought to your plans for next year and beyond. If those plans involve starting your own business and working from home, then start putting the wheels in motion NOW by enroling in our small business StartUp course or by visiting the StartUp Academy website and browsing the current business opportunities available.

EzyLearn partnered with StartUp Academy earlier this year to give our students and readers the opportunity to start their own business, while also having access to the training and guidance needed to make a new business a success. There are currently a number of business opportunities available across an array of different industries. Visit the website for more information and to register your interest.

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Invoice Your Customers Directly Using PayPal

We were recently surveying our PayPal account and discovered that you can now invoice customers directly using PayPal. While it doesn’t eradicate the need for a good piece of accounting software, this facility makes it very easy for people to get started in business — particularly businesses with very few expenses. Continue reading Invoice Your Customers Directly Using PayPal