Can I Use Venmo for Business?


If you’re like most small business owners, you keep a close eye on the fees that rack up when you’re getting paid.

I don’t blame you. Those little fees add up to a lot when everything is tallied up at the end of the year. As your business grows and the fees continue to climb, the next logical step is to find a way to avoid them, right?


While there are many ways that you can lower your processing fees, if you’ve completely eliminated the fees, you’re most likely breaking the terms of service for the processor you’re using. Payment processors like Venmo and PayPal Friends and Family offer transaction free options, but they are NOT for business.

Ask around enough and I’m willing to bet that you know someone who has had their Venmo or PayPal account locked because they violated the terms of service, or they have been a victim of a Venmo scam because there are no buyer or seller protection on their platform.

Both PayPal Friends and Family and Venmo have strict rules on how you can use their service, so to answer your question:

  • No, you CANNOT use Venmo to accept payment from (or send payment to) another user for a good or service.
  • No, you CANNOT use PayPal Friends and Family to accept payment from (or send payment to) another user for a good or service.

Not only are you breaking the terms of service by using Venmo for business, but if you use a bookkeeping software like QuickBooks or Freshbooks you’re going to want to kick yourself when you categorize your payments because NONE of the details from the transaction are imported into these systems.

Instead of trying to completely eliminate these fees, I recommend taking the following steps.

  • Request that your client pays you via ACH or E-Check. ACH and E-Check payments generally have lower fees than your typical credit card processor, and many business management suites (like Dubsado) make it easy for you to collect payment via these options.
  • Build the cost of credit card processing into your fees. Yes, you would still be paying the fees, but this will allow you to maintain your profit margins and offer credit card processing as an option. Note: This does not mean add an additional fee for clients who use credit cards. This means upping your price for everyone.

Should I accept checks or cash?

You may have noticed that I did not recommend accepting cash or paper checks. There are three main reasons why I do not recommend these options: they are inconvenient, it adds additional manual labor to your bookkeeping process, and it takes the client longer to settle the invoice.

Think about it – when is the last time you had your checkbook ready to make a payment? I literally have to open a safe to write a check, and once I have the check ready I have to find a stamp. And I know I’m not the only one who finds checks inconvenient. My first year in business I requested that clients paid me via check and it took them four to five times longer to pay invoices, and it really put a bind in the cash flow. Cashflow is of supreme importance for small businesses. Without cash flow in your creative business, you can’t pay the bills, pay your people, pay your taxes and pay yourself.

No matter what payment processor you use, be sure to keep your bookkeeping up-to-date and track your expenses, so you can make smart decisions about the future of your business.

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Amy Northard, CPA

The Accountant for Creatives®
+ taxes + bookkeeping + consulting
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