Alas, it is time to pay. In fact, you’ll need to set up your billing information before your account is activated. There are no free rides at Google! Head over to the Billing tab. New users will be presented with a form. You’ll have to fill in these five details:
- Account Type – Business or Individual
- Name and Address
- How you pay – Automatic or manual payments
- What you pay with – Credit or debit card, bank account, funds transfer, etc.
- Billing communication language – English, Italian, etc.
This form is noticeably different from entering your billing information on Asos.com. There are few key decisions that you have to make at this point, some that you can change later on and others that you cannot ever change for the entire lifespan of your AdWords account. Read this section thoroughly before hitting that “Submit” button.
Your account type determines what taxes will be added to your charges. It also affects the types of documents that you receive. Here are the differences in a nutshell.
|Google will consider that your campaigns are for non-business purposes with no economic gain. Perhaps you’re advertising stuff related to your hobby.||Officially registered as a business in the UK.|
|Payments are made out to the payee name of the account holder. For example, Suzy Williams.||Payments will be made payable to the company’s name, such as Suzy’s Shop Ltd.|
|All advertising spend will be charged the Irish VAT rate of 23%. You can check how Adwords spend are taxed in your country.||Google does not charge taxes, instead you will be responsible for assessing and reporting your own taxes.|
UK businesses benefit from the “reverse charge system”, in which you charge yourself tax and claim it back as a business expense.
|No VAT ID needed.||You need to supply a VAT ID when setting up the account.|
Otherwise, there are no differences in payment structure or cost.
You cannot change this setting later. To change from individual to business account, you’ll have to close the account and start a new one later. If you’re a young start-up operating from your bedroom without company licenses and so on, it’s time to think about all the boring stuff. How do you foresee your venture to look like in the next 2 years?
How you pay
There are two payment settings, which determine how you are charged by Google and when bills are issued to you.
Automatic Payments – Pay after your ads run
You will be charged only after reaching your billing threshold or 30 days after your last payment, whichever comes first.
Manual payments– Pay before your ads run
If automatic payments were like monthly postpaid phone bills, manual payments are your prepaid phone cards. You “top-up” your AdWords account with a certain sum of money and charges will be deducted from this amount.
The manual payments setting isn’t available for new accounts in certain countries, including United Kingdom. If you can’t see the option when signing up, guess you’ll have to stick to “Automatic Payments” for now!
Monthly invoices – Pay on credit
This is only applicable for bigger business owners. If you are registered as a business for a minimum of one year, and spend $5000 a month for at least three months in the previous year, you can apply for monthly invoicing! Basically, it’s a credit line. You’ll accrue costs and receive invoices once a month and pay for these invoices in the next 30 days. To apply for this option, you’ll have to contact Google.
Everything you need to know about Automatic Payments
Note: Graphic taken from Google’s help page. Other graphics in this article are original.
Your account’s threshold is set by Google. This amount usually lies between £50 for new accounts and £500 for larger accounts. However, thresholds vary by account, country and currency. Make sure you check your account to learn about the threshold that it is applied to you.
Here are two examples explaining the graphics better. Let’s follow Ben, who is a small business owner in Sheffield. Ben has just started using AdWords and his account has a £50 account threshold.
Scenario 1: You do not hit your threshold within 30 days.
In the first month, Ben starts with low bids. His ads start running immediately as they are placed, and no payment is made yet. After 30 days, he accrues costs that only form a portion of his threshold.
- Ben’s primary payment method (for e.g. his credit card) is charged £30 then.
- A new billing cycle begins after the 30 days .
Scenario 2: You hit your threshold before the 30-day billing cycle is up (e.g. on Day 10).
Ben gets the hang of AdWords and starts amping up his game. He spends £50 in ten days.
- Google charges Ben immediately.
- Ben gets a new threshold amount. For example, Google may offer Ben £200.
- A new 30-day billing cycle begins immediately.
- The threshold keeps increasing until Google finds the ideal amount for Ben’s usage pattern.
What you pay with
Now that you understand how often you are billed, let’s discuss what you pay with. In the UK, you can make payments using three methods:
- Credit or debit cards (Visa or MasterCard)
- Bank account, or also known as direct debit
- Funds transfer
The process of adding your payment details is very straightforward. Just sign in to your AdWords account, click on the gear icon and choose “Billing”.
|Credit or debit card||Bank account or Direct debit||Funds transfer|
|Processing time||Immediately||Two to five business days, depending on your local bank processes||Two to five business days, depending on your local bank processes|
|Ad delivery||Immediately after payment||After bank account is verified. Campaign will not run in the meantime.||After the funds transfer is completed. Campaign will not run in the meantime.|
- Payments from Google AdWords will appear on your bank statement with the phrase “GOOGLE” and your 10-digit customer code.
- AdWords may test a small charge to make sure that your card is valid. Google isn’t trying to steal £1 from you! They’ll return this amount later, by giving you a discount off your bill.
- It is also a good idea to keep all records of payment (receipts, screenshots of your bank’s online statement) until the money shows up in your AdWords account. This proof of payment should show the date the payment was made, the amount and currency, the beneficiary (or payment recipient – Adwords) and the name of the bank/card/account holder. You can blackout sensitive information (like your account number or card number) when sharing these with customer service representatives. It is generally good practice to do this when you pay for anything online, really.
- For funds transfer – You’ll need a unique reference number, which is found on the transfer information form generated in your AdWords account. Do not confuse this number with your AdWords Customer ID. It is very important to include this reference number in your bank transfer form.
- On an ordinary day, you can check your payment status in the “Billing” section of your account. Select “Detailed” above the table of information – the table will then show one of the following statuses.
- Automatic payment scheduled
- In progress
- Payment declined
The currency that you’re billed with cannot be changed. You would have chosen your currency back when you first signed up for an AdWords account. If you would like to change the currency you choose to pay with, you’ll have to close your account and start a new one.