Payment processing for small businesses is vital. Without it, you, the merchant, will not get paid for your products and services. Since payment processing is briefly paused on certain bank holidays every year, it is important to identify these dates and plan ahead for the temporary delay they cause in obtaining your revenue.

What are the U.S. bank holidays?

There are 10 federal holidays on which the banks are closed in the United States. 

• New Year’s Day: Jan. 1.
• Martin Luther King Jr. Day: Third Monday in January.
• President’s Day: Third Monday in February.
• Memorial Day: Last Monday in May.
• Independence Day: July 4.
• Labor Day: First Monday in September.
• Columbus Day: Second Monday in October.
• Veterans Day: Nov. 11.
• Thanksgiving Day: Fourth Thursday in November.
• Christmas Day: Dec. 25.

In certain instances, banks may elect to close on the day before or after a holiday if it falls on a weekend. Additionally, some financial institutions stay open on certain holidays albeit with staffing and service limitations.

How delays affect your business.

If you are like many business owners, you rely on the Automated Clearing House (ACH) network for bank-to-bank transactions. These may include direct deposits to pay your staff, withdrawals from customers’ accounts for recurring bills, and payments you make to third-party vendors that are withdrawn from your business account. All of these types of ACH payments do not post on federal holidays, usually requiring an extra business day to be completed.

How can you minimize the impact of ACH processing delays?

There is nothing you can do to change the federal holiday structure, and you won’t be successful in convincing the central ACH network to circumvent these rules. However, there are some proactive steps you can take to soften the blow of bank holiday payment hold-ups.

• Mark your calendar to reflect upcoming bank holidays. Prepare for them in advance by adjusting your cash flow budget accordingly.
• If the bank holiday interferes with your usual employment schedule, run your payroll early that week. If this is not possible, give your workers warning that their money will be late in coming.
• If your bill to one of your suppliers comes due on a bank holiday, adjust your payment schedule on a one-time basis to ensure that you will not incur any late charges.
• If you often find yourself short of revenue and plagued by delinquent customers, consider encouraging your buyers to pay you on a recurring or subscription basis. Ask your merchant service provider how you can set up your point of sale system to accept these transactions. Then talk with your customer to initiate the plan. You’ll just need their bank account numbers, the agreed-upon amounts to be withdrawn, and the set date each week or month on which the withdrawals will take place. Once this is accomplished, your recurring billing can proceed with minimal maintenance and maximum stress relief for both you and your customers.

Bank holidays are here to stay, and they will continue to interfere with your regular operations to some extent. However, planning ahead and managing your budgets with these dates in mind can minimize their effect on the cash flow that is so key to the success of your small to mid-sized business. 

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