Benefits of Direct Debit for Businesses

Reasons to set up the ability to take payments via Direct Debit:

• Reduces Admin Time

  The time you would spend on chasing and managing payments will be reduced allowing you to spend your valuable time working on your business.

• Cost Effective

  You will not incur additional costs of using PSP’s (payment service provider’s) to get paid.

• It reduces payment failures

  When you set up a direct debit, you provide your bank account details to the service provider, they will in turn, verify your details reducing the likelihood of any error like the payment amount or account details being wrong. It also reduces manual handling, unlike cheques or manual payments, direct debits are processed electronically, minimising the risk of payment failures due to mishandling or post delays.

• It improves cashflow 

  With the ability to set payments, you will always know when payments will be arriving so you can plan accordingly. Late payments will impact your cashflow because you do not know when to expect them. You can also improve the speed of your inbound cash flow, increasing the amount of cash your business will have on hand at any given moment and can use this to plan accordingly. Predictable payments will make it easier to budget and manage your finances.

• Customer Convenience 

  Many customers will appreciate the convenience of direct debits since they will also not have to remember the payment due date on their account or take manual actions to pay bills. This can lead to increased customer satisfaction.

With the ability to predict the incomings and outgoings of your business, you will be able to budget and manage your finances better. To be able to offer your customers a more convenient method of payment by not limiting your payment methods, you will be able to attract more clientele.

Benefits as a consumer:

• No Fines for Late Payments

  Payments are made on time meaning you can avoid late payment fines. Did you know you can set up a direct debit with HMRC to pay for VAT or PAYE?

  HMRC will notify you, shortly before every direct debit is to be taken.

• Direct Debit is flexible

   You can control the payment and can adjust the amount or frequency of the payments. You are also able to cancel your direct debit at any time. Please be advised that you should notify the company before cancelling so to not incur any charges for payment not collected.

In summary, direct debit offers payers a secure and convenient way to pay for goods or services. The use of direct debits can save time and money for your business by avoiding those pesky late payment fines.