There are plenty of smart and legal business accounting practices that can help you make the most of your money. One of those practices is to use off shore merchant accounts for your credit card processing needs. Not only can these types of accounts save you money, but also they are legal and they often provide service that is at the same level of service - or better - as the service you get on shore.
These days, no business, however small, is complete without a credit card processing facility. The reason for this is that a large number of people prefer to pay for goods and services with debit or credit cards instead of paying by check or cash. By adding the ability to process debit and credit cards, you can serve a wider range of customers. Thus, it is a smart business practice to offer this facility to your 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.
You can open a merchant account with one of many companies in the United States. But you could also look at offshore accounts available in countries in Central America, Europe and the Caribbean. An off shore merchant account can help you save money in many ways with respect to your debit and credit card transactions.
The first advantage of an off shore account is that your money is considered as foreign income, which is taxed at a different rate than domestic income. Of course, you must speak to your accountant or a tax attorney and understand the accounting requirements accompanying this option. Nevertheless, if you choose to open an off shore merchant account, you will most certainly save on taxes.
Moreover, you will save money in upfront costs and security fees in an off shore account. You will not be required to pay as much money for initial deposits and holdbacks for charge backs as you have to pay for opening on shore accounts. On shore accounts keep back quite a bit of money for security reasons each month in order to cover charge backs.
While some transaction fees in off shore accounts are a little bit higher, these are more than offset by the savings in other fees and taxes. Moreover, the service levels are often very good, as these offshore companies are actively trying to win and maintain customer accounts.
Checking out the feasibility of an off shore merchant account can be one of the smartest accounting moves you can make for your business.
