10 Questions to Ask Direct Debit Providers Before Streamlining Your Accounting

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If your business wants to tap into the power and popularity of Bacs payments, signing up with one of the many Direct Debit providers out there will help significantly streamline your accounting.

They will manage the whole process for you from start to finish, freeing up time, money and resources.

Thousands of UK businesses have already made the move and Bacs statistics reflect this. In 2016, 11 new processing records were set, including:

  • A 3% increase in the total number of transactions processed to 6.222 billion
  • A 4.1% increase in the value of Direct Debits processed to £1.26 trillion
  • A 4.9% increase in the value of Direct Credits processed to £3.52 trillion

Google ‘Direct Debit providers’ and you’ll be faced with a choice of bureaux all promising the best service, the best value and the best security.

As with all suppliers, you want the best fit and the best price for your company. But how do you select the right bureau for your business and what key questions do you need to ask Direct Debit companies?

1. Can You Provide Evidence of Your Credentials?

You want to be 100% sure that you’re dealing with Direct Debit experts. All companies offering Direct Debit services must be Bacs-approved, but beyond that how can you be certain of their professionalism?

direct debit documents

  • Ask about their trading history and reputation, both with clients and within the banking industry
  • Check how many clients they have and what type of companies they work with
  • Research whether the business is growing. If not, why not?
  • Read their online testimonials and request to be put in touch with clients so you can ask them questions directly
  • Speak to people you know who already use one of the Direct Debit collection companies and ask them for an honest appraisal

Research FastPay, for example, and you’ll discover that the company was incorporated in 2008. You’ll also learn that over the last nine years, they’ve arranged Bacs payment schemes for hundreds of clients including high street banks, national newspapers, the NHS, energy companies and Premier League football clubs.

You’ll see that their customer testimonials cover numerous industries and showcase the wide-ranging benefits enjoyed by switching to Direct Debit, as well as the high standards of service available.

2. Can You Guarantee Our Money Will Be Secure?

Several important safeguards ensure that Direct Debit is the most efficient and secure way of collecting money from your customers.

All Direct Debit companies operate under strict Bacs guidelines, which focus on confidentiality, integrity, compliance and availability, and adhere to the Data Protection Act (soon to be replaced by the General Data Protection Regulation).

secure direct debit transactions

As well as being carefully vetted by Bacs, Direct Debit collection companies are also closely monitored by the banking industry.

Part of Bacs’ comprehensive regulations is the Direct Debit Guarantee, one of the most stringent set of rules within the financial industry, which protects both customers and bureaux.

It ensures that customers are always advised of any changes to the amount, date or frequency of their payments; that they can cancel a Direct Debit at any time; and that if an error is made they’re entitled to a full and immediate refund from their bank or building society.

FastPay offers several extra layers of protection to enhance the security of their services. All payments received via their Managed Service are held in a client trust account which is regularly audited. All clients’ money is also held in a separate virtual account to prevent cross-contamination.

They also have a failsafe guarantee with their sponsoring bank by means of a legally binding indemnity. This acts as an additional safeguard for funds received under the Direct Debit Guarantee.

To insure against fire or theft and protect against the threat of cyber-attacks, FastPay operates a dual server policy, both onsite and offsite. Data is immediately accessible and retrievable, providing complete peace of mind and minimising downtime delays.

And their 128-bit encrypted servers are protected by multilayer passwords, with only company directors acting as authorised administrators. These servers ensure all online communication involving customer information and payment details is secure.

3. Can You Offer Advice Before We Sign-Up?

Before signing-up, you need to know that the company you’ve chosen can tick all your payment collection boxes. It’s no good becoming a client and then realising that they don’t offer integration with your software or a pay as you go option.

A website will give you a good steer but what you really need to do is speak to an expert. FastPay’s experienced in-house customer services team can answer all your questions.

They can advise about which service is right for your business – Bureau or Managed – and they’ll cover queries such as how the reporting system works, how much you can expect to pay and how much input you’ll need to have. You’ll get the very best advice to make the process straightforward and easy.

With hundreds of clients from all sectors of the marketplace, FastPay can also provide detailed information about how the scheme was implemented for businesses like yours and what benefits it has brought.

This personal insight into what Direct Debit companies can do for you will give your decision-making a helping hand.

4. How Much Do You Charge?

Budgeting for your shift to Direct Debit services is an important part of the planning stage: this is going to cost but exactly how much and will the outlay be worth it?

Every bureau has a different fee structure. All will prove considerably cheaper than becoming a direct submitter to your bank and managing the process in-house. This option involves set-up fees in the thousands of pounds, along with the ongoing costs of processing, software updates and staff training.

direct debit costs

Some Direct Debit providers will have higher set-up fees, others will have higher collection charges, some will have various hidden costs.

Find out as much as you can about what costs are involved and study any small print. Do they charge for customer support? Do they offer volume discounts?

FastPay guarantees a truly transparent pricing structure with detailed cost breakdowns listed on their website. There are no hidden costs, no monthly or yearly fees and a flexible pay as you go system is available.

With free email and phone advice, collection volume discounts and straightforward invoicing, they can also guide you through any bespoke cost for your business.

Remember that paying for your new supplier will improve your bottom line rather than taking money away from it. Your accounts team will be spending far fewer hours chasing up late payments and resolving issues because Direct Debit and your chosen bureau will be taking care of everything.

5. How Quickly Can You Set Up Our Business to Accept Direct Debit?

Once you’ve decided that you want to accept Direct Debit payments from your customers, you’ll want to be efficiently collecting cash as soon as possible.

While becoming a direct submitter to your bank can be a lengthy process, spanning weeks and sometimes months, you could be accepting Direct Debit payments by this time tomorrow.

24 hour direct debit set up

Some Direct Direct providers, including FastPay, can have you up and running within just 24 hours. If your customers sign-up via a paperless online system, there’s no need to guess when paper mandates might arrive in the post, no complicated forms to fill in and no waiting for long-winded systems to be set up.

The time benefits of becoming a Direct Debit bureau client will continue long beyond the signing-up process. Your staff will be relieved of the ongoing time commitment of managing regular payments in-house, freeing them up to focus on other aspects of your business and fuel its growth.

6. What Level of Customer Service Can You Offer?

Outsourcing your customer payment management is a big step for any company. You’re passing the reins over to an external team and you want to be assured that any issues, questions or concerns are heard and addressed.

Email help desks are great for getting quick answers to quick queries but what if you’d prefer a slightly more personal approach?

Remember to ask the Direct Debit collection companies that you’re researching what their customer service set-up is like. Is it outsourced to a call centre staffed by people without the specialist in-depth knowledge you need? Or do they have an in-house team of advisers who work within the industry and know all the important ins and outs?

FastPay prides itself on exceptional customer service. Free lifetime email and phone support is included in all services, giving clients direct access to experts who work within the business.

This high level of ongoing personal, technical support from a dedicated team has resulted in more than 50% of our new clients being referred to us by existing, happy customers.

7. How Flexible Is Your Service?

Direct Debit is famous for its flexibility. Don’t miss out on this vital benefit by signing up with a bureau which restricts it and therefore you.

For example, some Direct Debit companies only allow you to make collections on several specific dates each month. Others prevent you from changing the amount collected as many times as your business needs require. This is unnecessarily limiting for both you and your customers.

You may also find yourself tied into a contract when you decide to leave for a different provider. You may have to give notice or be charged a penalty for leaving mid-contract.

FastPay recognises that the success of Direct Debit relies on its flexibility and adaptability to everyone’s needs and its services reflect this. You can collect what you want when you want and won’t be bound by a tie-in period.

8. How Do You Keep Me Informed?

Direct Debit is designed to make life easier for everyone involved: the days of relying on unpredictable Standing Orders and cheques being posted on-time are numbered.

One of its main benefits is keeping you 100% up-to-date with your customer payments.

Any bureau which doesn’t offer an instant reporting service for its clients is missing a trick.

Daily Direct Debit reports are a crucial part of streamlining your accounts processes: whether they’ve been successful, bounced, failed or been cancelled, you’ll quickly know about any issues.

Some Direct Debit collection companies only report weekly or monthly which severely restricts how responsive your accounts team can be, impacting both cashflow and customer service levels.

Getting all the important information straight into your inbox each day means you can resolve problems efficiently and professionally.

9. Can We Integrate Our Software With Yours?

By choosing Direct Debit, you’re bringing your payment collection processes into the digital age. Don’t get left behind again by choosing a Direct Debit bureau that can’t fully integrate your software systems with theirs.

Check that working with this particular supplier will be the very best technological match. Can they integrate with platforms such as Xero and Sage to streamline all your accounting tasks? Do they offer access to an online dashboard that allows you to view full transaction histories and your customers’ account status?

Integration is the key to reducing costly and time-consuming reconciliation, so ensure this question is on your list.

10. Can You Provide Personalised Documentation?

Some companies which offer Direct Debit services don’t take your own branding into consideration when designing customer communications.

Instead, they’ll receive generic emails and letters from the bureau themselves, complete with their unfamiliar logo. Their name will even appear on customers’ bank statements which could lead to confusion: who is this company? Why are they debiting my account?

Others, including FastPay, offer fully personalised documentation to put your company first. Your name and logo will appear on all correspondence and your name will appear on bank statements.

If this is important to you, and it should be because building your brand is vital to building your business, make sure you ask your planned provider if this is a service they offer.

Now you’re armed with all the questions you need to ask when researching Direct Debit services, you’re ready to choose a provider who can tick all the right boxes.

Get it right and the benefits will soon be evident: improved cashflow, reduced admin time and costs, flexibility, better security and happier customers.

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