How is payment made in business?

Businesses that are profit driven produce products and services for the consumers and attach a demand for the transfer of ownership of their products to the public, which is usually monetary. Customers willing and desiring to buy those products to own or sell them must give them the demands for their products. Usually whoever pays for a service or product receives it from them. 

The transfer of the money, (the demand) from the customer to the business is what payment means.

Not only is payment made for products, but also for debts. Some could incurred debts and ought to pay for it.

    THE IMPORTANCE OF PAYMENT 

There are few business men that does not monetize their products. The drive behind the creation of products on their part, is charity or generosity. Some target members of their business, while others make the entire public their beneficiary. 

Those whom are beneficiaries of their products receive it without paying for it; or giving any resources to the producer. They didn't attach that as demand for securing their product after all. It was meant for free. If you want to acquire a product from such Business you do not have to pay a penny. You can, as a member of the public merit ownership of it.

But there are some businesses that monetizes their products. The reason they established companies and produce goods or products is to monetize it; sell it for an amount of money. They are willing to give the products to those willing to pay for it. For such ones their objective is not generosity but money. They created products to use it as a tool for acquiring profit. They have the right to exercise sovereignty over how their products can be acquired. 

For any product they produce, they attach a specific amount. Whoever pays for it, usually receives ownership of it. Those who do not, never qualify to receive it, but continue to wish they could obtain it. 

Therefore the obtainment of monetized products requires money. Since money is the demand of the producer for the exchange of it with the buyer, it must be giving to him, for him to bequeath the ownership. 

Monetized products are often secured with money. The buyer pays the amount the producer requires, and the producer gives him the product. Payment therefore- the transfer of money to the producer, is the route to acquiring any monetized product. And this is why it is a trade necessity. 

In the past trading was accomplished through trade-by-barter. The exchange of products for products. The buyer would give to the seller an item of equivalent value and receive a product from him. If we wanted to acquire any products in those days, all we had to do was to find a producer and give him a product he desires for the one that we want. This days it is done with money. It was never free. At no point was goods ever gotten for free. It always required money. As far back in history as we can look, men always generally acquired products through payment. So it is imperative to trading, a tool for acquiring products. It is a tradition we must maintain. It is our right to securement of desired products.

You desire to own a product. You know that products are sold at the market. You must go there to get it. In fact, the product you want is sold at that particular market. So going there is a must. Then you leave home for the market. There are many enticing products there. But you don't want them. The one that you came for is the one that you want to buy. You were fortunate to find it there. Just when you removed it from the shelve and took it to the man at the counter, to declare your interest in owning it, he told you that you must pay a specific amount. You know just have to, because the doorpost to the building has a written in it which you saw 'Williams Business'. Business implies that they are profit oriented.

The point is that if you can secure the product without payment, then payment is of no value in trading. But you cannot. And it is what is used to secure products, making it important and helpful for desires of products.

Payment  is achieved through very many methods. Knowing them is important if you would ever make patronage, so that you would learn how you can pay for items you want to buy, and particularly if you want to run a business, so that you would know how your customers would pay for your services or products. There are four outstanding ways customers can make payment.  

1.                    LEGAL TENDER 

This involves the giving of physical money to an owner of a product you want to buy. The physical money is refered to as cash. It is physical because it could be touched and felt. It is visible. Coins and notes of a country consists physical money. If for instance you want to pay for a brand in America, you could give to the seller the USA's Dollar. Traditionally, it is the money being used by the country the business is cited that is used. It is the commonest means of payment. It is embraced by almost everyone. You would find people who prize goods paying for it with physical money, at; stores, malls, supermarkets and other places. 

2.               THROUGH THE BANK

The banks have methods of payments which is unique to them, recognized and used by people to make payments. People entrust their monies with the bank. So if one has money in the bank, he can use it to pay for an item or service, it belongs to him after all. But this is done through means defined by the bank. It consists of anything that could move or transfer money from the account of a customer to that of a brand owner, or service giver, since the customer has to be the one to pay for items. 

Conventionally payment through the bank is achieved through 7 principal means which we would consider.

a. Cheques: A cheque is an order written by the drawer to the bank, to pay on demand a specified sum of money to the person named in it as payee. If a customer want to pay for a product or services, he would issue a cheque to the owner of the product, and request a certain amount to be given to him, whom he would write as the beneficiary of it, and the product owner would take the cheque to the bank, the bank would then give him the amount the consumer requested to be given to him. That money given is his demand for his product. He would afterwards give the item paid for to the customer. This can also be used by a debtor to pay for his debts. 

b. Standing order: This is an order or instruction by an account holder to the bank to pay a certain sum of money on his behalf at regular intervals to a named person or organisation. Just as it is with cheques, the standing order would be issued by the person desiring to pay for a goods or settle his debts, to the owner, whom would take it to the bank and receive it from them.

c. Bank draft. Bank draft is a means of payment. It is a kind of cheque drawn on a bank, by itself or it's agent. It is used by a debtor when his or her creditor is unwilling to accept a personal cheque. The debtor pays the bank for it at the time of issue.

d. Credit transfer (Bank Giro): This is a method whereby the customers bank pays directly to the account of the bank of the creditor, whom could be the owner of the product being desired, or a person owed. 

e. Travellers cheque: As the name implies it is a kind of cheque. It can be used by travellers and businessmen to pay for debts or items. To prevent misuse, they have to be signed in the presence of the bank clerk who issued them and countersigned when cashing it.

f. Certified Cheque: This is a cheque which the bank has been ratified by the bank on behalf of it's customers to guarantee that the cheque will be paid. It is a means of payment. So it can be used to pay for items and settle debts. 

g. Direct debit: It is a transfer system in which a creditor by agreement with the debtor gives an instruction to the debtors bank to pay him or her a specified sum, by debiting the account of the debtor and crediting his own account.

3.       THROUGH THE POST OFFICE 

Payment could be achieved through the post office. There are means of payment that post offices provides, utilized by people and known globally. Five of them shall we consider. 

a. Postage stamps. This is a means of payment by which small sums can be sent by post. Postage stamps are used in settlement of small amounts on items being purchased, such as sending for samples. Post office accepts commission for it. You must pay them for it. 

b. Postal orders: This type is a means of payment that is provided by the post office, for small amounts. The requirement for the payment, is a payment of poundage to the post office- a commission. The person who wants to use it to make payment would fill it. He would write the name of the person to be paid on it and then the person written as beneficiary would be paid the amount stipulated. Thus, if a business or product owner,  has a product I want to pay for, I would make them the beneficiary of the order, and they would receive it.

c. Money orders: This is a means of payment used for large sums of money. If someone wants to make payment he would get the order form, from the post office, fill it, by indicating the person he wants to pay as beneficiary, whom would cash it.

d.This one is good for fast or emergency purpose. It is issued, when one wants money to be remitted very very fast to the person he wants to pay.

e. Postal Giro. This is a means of making monetary transfer through the post office. It involves transfer of money from one account to another, through Giro cheques. If you own this kind of account with the post office, then you would issue that money be removed from your account, to the person you want to pay for his services or products. 

4. BUSINESS MENS MEANS OF PAYMENT 

It consists of the use of; Bill Of Exchange, I Owe You, Promissory notes, which feccilitates or aid payments. As implied by the name, it is unique to businessmen. 

a. Bill of Exchange: Is an unconditional order in writing, addressed by a seller to a buyer, requesting the person to pay on demand a certain amount at a certain time. The person would oblige through the same method.

b. I Owe You: Is an indication that one  owes a debt and an undertaking to pay it,  in the form of writing. IOU is not a legal document. It is a non negotiable evidence of debt, involving a written account.

c.Promisory notes: It can be called an oath. It is an unconditional promise written by one that is owing to the person he owes, agreeing to pay on demand, a certain sum of money to the creditor at a specified date. 

You probably know those methods we have discussed, or you are learning them for the first time. But the key to success is learning how to use each and every of the methods we discussed to make payments. Only when you know, for instance how to use a cheque to make payment, can you. And otherwise, you can not. So therefore make yourself a student of the methods of how to make payments.