It’s not that long ago that collecting money by direct debit was an option only available to large corporations and multi-nationals. If you have ever investigated this as a collection method, you will be aware of the hefty qualifying criteria necessary to meet the requirements of offering a direct debit guarantee. Granted there have been a number of intermediaries, available to smaller businesses, that will collect, under their own name, on your behalf, but they typically involve prohibitive setup fees and expensive monthly and/or per transaction charges.
So the only really viable option to smaller businesses had been to collect by standing order. Although, as any business collecting money this way will know, this method has its shortcomings. Aside from the fact that it simply doesn’t feel professional to collect money this way, standing orders are inflexible, clumsy to setup and if a client misses or cancels the order it can take weeks before you become aware of the fact.
Roll forward a few years and the landscape for direct debits has changed dramatically.
It’s hardly surprising that new services have evolved. Any company that has paying customers wants to take control of its cash flow whilst reducing administration costs.
Today there are a growing number of services available that enable you to setup direct debits easily and cost effectively, with flexible ways to collect money including variable amounts, frequency, collection dates and even one-off payments. Furthermore, if a direct debit bounces or is cancelled you are notified by email within 24 hours; so you can follow up in a professional and efficient way.
If you have a business that offers payment terms, recurring services or subscriptions, direct debit is now a viable option for you and could dramatically improve your cash-flow as well as customer retention.