March 12, 2021
While it may come as a surprise to many business owners and entrepreneurs, SIC codes are important for more than just target marketing and sales tracking. In a world that’s gone almost completely digital, credit card transactions and online payment processing accounts for a staggering volume of sales today. No big revelation there, obviously. What many don’t realize, is that these 7-digit codes play an essential role when it comes to processing payments online and via POS terminals.
There are over 10,000 unique SIC codes in use today, characterized by a 3-digit primary industry code, and a more specialized 4-digit code based on the company’s unique industry niche. Using the wrong code during payment processing setup could end up costing you more per transaction, while complicating future audits and financial inquiries.
SIC Codes Ensure Accurate Transaction Processing Rates
There’s no such thing as a flat rate when it comes to the fees associated with credit card transactions and online payment processing, as each industry has its own unique rate. Using the wrong SIC code could result in you paying more per-transaction than you should be, or less than you should be, which will only complicate things down the road in the event of an audit.
Can Help Simplify Future Audits and Prevent Costly Fines
Audits and financial reviews are a standard part of doing business today and, as many businesses have learned the hard way, using the wrong SIC code when setting up your payment processing services can be costly, stressful and time consuming. If it’s determined that you were utilizing an SIC code that offers a lower rate, you could be responsible for difference if audited.
Ironically, you won’t automatically be eligible for any type of credit if it’s discovered that you were paying a higher rate in light of the initial entry error.
Make Sure You’re Using the Right SIC Code
Whether you’re a company that’s just starting up, or a well-established firm looking to make sure that you’re using the right SIC codes, the experts at Payments Max can help. Get in touch to learn more about how SIC codes affect payment transaction fees, or schedule a complementary consultation for additional information on how to prevent excess costs and stressful downtime.