when i start selling cakes from home and need to collect payment what do i exactly use if it was small i would accept payment when its delivered but what if i get a $200 cake? how would i go about that i would want a deposit atleast half and final payment when delivered right? what do you preferablyy use?

If i use pay pal do i just link the paypal button to them personally? and twice for a deposit / final payment?

ok first of all $200 is a small cake -- work with me

Never start a cake (not even a design!) unless you get a deposit. Deposits are non refundable should the client change their mind. A deposit should be a healthy proportion of the final cost (not some random amount! Based on a detailed analysis of all costs including electricity, petrol, printer ink, etc.) Sometimes you have to buy special pans or materials to fulfil an order - imagine doing so and the client saying "actually, I changed my mind; sorry!" and you are out of pocket for something that maybe no one else will request in the future... 

Use PayPal. Clients can make a payment to you using your email account if you do not have a webpage that will redirect them there. Ask them to include a reference so you can tie the payments with the orders. 

You can easily log onto PayPal and check your balance and see who made payments, when and of what amount. Then you can transfer that info onto a spreadsheet on your computer. I think CakeBoss sells a programme that you can use to plan and track orders, if you want to invest in it. 

I am sure @costumeczar  can give you some useful information. She made an excellent video on how to handle enquiries. She will probably be able to tell you (and us) how to deal with deposits and final payments. :)

i mean small like 50$ cakes  lol

like wedding cakes or birthday cakes?

say they were fancy big total cost 600

deposit using paypal would work?

and than one final payment 

 or should i let them write a  check?

You can also get a PayPal debit card and use the money right of your PayPal account. If you want, you can get a PayPal Here credit card reader (FREE) to accept card payments without having to send the customer an invoice, etc, or if they don't want to deal with the online aspect.

ty shocklot

i get all my money up front for wedding cakes -- by at least a month -- i allow three non refundable non transferable payments -- but if they booked within a month of their date then they pay all  -- checks can get tricky but so can paypal if say grandma is paying and she doesn't do email and the internet -- so never say never but that's why i get my last payment weeks in advance so i can see if a check clears -- 

one good rule is don't take checks from banks that are not in your local area -- sometimes but it happens rarely  where you have to drive to that bank when the funds hit so you can collect -- so only let them write local checks -- but watch out for money transfers and weird things like that -- things can go awry easily

pretty sure you can invoice from paypal

are you going to get quickbooks and/or cake boss? either and both of those will help you immeasurably with this kind of thing

what if you made a cake and they didn't pick it up -- that would bite right -- get paid first for everything is a good policy -- but i did not do that for a handful of reliable wealthy customers but you're so young it would be good insurance for you to require $$ in advance and then when someone was wonky with that it would be a good red flag 

@-K8memphis  you can bend the rules with people you have done business before and trust. But for someone walking off the street and asking for a cake, you are right, it is good to be firm and ask for full payment. Cheques sounds like too much hassle. Don't forget, guys, that nowadays people can make direct payments to you using their mobile phone. Here in the UK they call it Pingit. All you need to do is connect your mobile phone number with your bank account - it is really easy! Don't they have something similar in the USA?

Several banks offer that option, Shock, but depending on the bank it's  more of a 3-day transfer than an instant thing  

you can invoice right from PayPal, yes   , or use the credit card reader.  Personally, I think using the credit card reader seems a kitten more professional, and I think the fees are less than when someone sends you money through pp

Shockolata wrote: I am sure @costumeczar  can give you some useful information. She made an excellent video on how to handle enquiries. She will probably be able to tell you (and us) how to deal with deposits and final payments. :)

Oh yes, I can...

I'm home-based, and the way I do it is a $100 deposit to book the date, required with a signed contract. If someone sends me a check and no contract, I don't deposit the check until I get the signed contract from them too. That happens a lot because the bride will take the contract, but the parents will send the payment, so they might not be mailed from the same place at the same time. Or they'll call and give me a credit card over the phone and send the contract later.

The $100 is non-refundable and I always refer to it as a "retainer," not a "deposit." A retainer books the date, a deposit can be interpreted as a payment toward an item. If they cancel the argument could be made that no cake was produced, so a deposit should be returned. I refer to it as a non-refundable retainer because of that.

The reason I only do $100 is because that's enough to make people think twice about cancelling for no good reason, but it isn't so much money that I have to sit on a pile of money I technically haven't earned yet. I don't spend any money that's refundable until the cake has been delivered, since if I get hit by a truck and my husband has to refund a bunch of money to clients he'll have it in the bank to refund.

Some people will do a 50% retainer, but that's totally up to you. For wedding cakes I don't think people would think 50% is strange, but for smaller birthday cakes, etc, I'd require 100% up front. I'd say for me that used to be anything less than about $150, and I told people that the cake isn't booked until the payment was received. If they wait until less than a few weeks beforehand I require cash, since if you take a check to the bank the check is drawn on the cash it they still charge you a fee if you don't have an account there.

If you decide to take credit cards (I do) you have to be aware of the risk of people disputing a charge. I had a client who disputed a charge once and opened a case with paypal (she was loony.) Anyway, in talking to the people at paypal, one of them told me that for cakes the only way to avoid that would be to take only cash or checks, since the kind of complaints people have about cakes aren't anything they can verify. So the credit card companies or paypal would pretty much have to side with the customer. Most people are normal, but all it takes is one loony tunes one to make you want to never take credit cards again. 

There are a few credit card companies you could use that are simple, paypal lets you send invoices to people and they can pay you that way, or you can get a paypal credit card reader to take in-person payments, I also have a Square reader so that I can take payments on the spot. Both of them are now switching over to the chip cards, and they're charging people for the readers, though, so you'll probably have to pay a fee to get a reader now. Square had an offer to repay the cost of the reader if you signed up with them, I don't remember the details but you can check it out at squareup.com

Never, never, never get payment at delivery. If you haven't been paid, don't turn your oven on. Custom cakes aren't something that can be resold easily if the customer doesn't show up, and you'll be stuck with the cake and out the money and time it took to make it. If someone gives you a hard time about paying in advance you should watch out, because most people know that custom order=pay ahead of time. You can send them a paypal invoice and they can pay online If they don't want to pay online they can send you a check. If they don't have a checking account they can give you cash or a money order.  

I don't care how they pay the retainer or final balance, if one is paypal and one is a check that's okay. But the balance should always be paid ahead of time by a few weeks at least. Never wait until the week of to get the balance, banks won't always let you know if a check is bad for a couple of weeks after it's deposited, and sometimes longer.

Thank you @costumeczar  I knew you'd come through for us! :) Pingit payments are instantaneous in the UK. I sent money to my friend who had a baby and she phoned me 5 minutes later to thank me for the surprise. They take more days if the recipient hasn't set up an account because they send them a notification and then they have to register for it which takes a bit more time, especially if they need to do a bank to bank transfer for it. It is a bit complicated to explain in a few lines but I am so impressed with Pingit. People hardly use cheques in the UK nowadays as they are so much hassle (they have to be deposited into your bank account and take a few days to clear) which means constant trips to your bank, queues and waiting times. 

Ah customeczar, on the money as usual.  I am a small CFO business in California.  I use Square, both the app with reader and Square Cash, where I send a request and they send me money straight through the request.  I have always gotten my money paid the next business day into my business account.  The fees are minimal and worth it for the ability to use CC without going through PayPal, which I will not.  (too easy for someone to fight you for the money, as they always seem to side with the customer).  90% of my payments are taken over the phone, ran, and then I can send a receipt from the AP right away.  Easy and so far, my customer base love it.

This is an excellent post! Costumeczar you are an invaluable resource for the baking community--I saw your video on inquiry procedure as well.  Excellent.  Bakers helping bakers, women supporting women--it's a very good thing indeed.

Thank you, That's very nice of you all to say.

@Shockolata  that's a big difference between U.S. payment processing and most of  the world. We don't do bank transfers like other countries do. When someone asks us for our bank account numbers we immediately think of identity theft, nobody pays for things that way here. It sounds much easier, though. It will all be electronic eventually.

i was looking into square up since you can input card numbers through it iwas thinking more that and having the reader to im still waiting on my documents to go through for my llc  it was suppose to be 1-3 days so hopefully tomarrow it pops up! do you think it be best to wait first and than order stuff like business cards ?

im coming up with a general supplyh list so i know what to have on stock :) just ordered a stainless steel table to :D

 When im done ill post a website link hopefully get all of your opinions :)

oh god I love buying equipment, tables etc

have a blast

Don't forget the fees of accepting credit cards through things like Paypal and the like. It's not too much, but it's not free for the business, usually it's a percentage or a set monthly fee. Cash is always nice! When I bought my little guy's first birthday cake, I paid in cash (around $100) for a 10-inch round, 2-layer cake. So don't be afraid to take cash, just make sure you know how to spot fake checks, counterfeit bills, and scam orders that target newbies. The scam I've seen people talk about says they want you to pay the person who is picking up the cake (delivery/transport fee). Or they accidentally wrote the wrong amount on the check and want you to send them the remaining difference. That's a red flag! Also Western Union and money orders always stink of scam artists. I've had to deal with these types at place I've worked at, not fun.

You should also look into getting a bakery-business book. It would be a great reference. I have one by the dummies series, and one of Mimi Fix's books. I know there are several people on here who have written about the business side of baking and I have a few of their books on my wish list.

Good luck, you can never have to many reference books! (~and that's according to my hubby who kept my math text book as a reference book, ha ha.)