Direct Debit for Agencies: A Guide

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Running a digital agency has its fair share of challenges: attracting clients, producing quality work to retain those clients and, of course, getting paid by them reliably.

Invoicing can easily become a major headache. Who wants to spend time on dull spreadsheet management, manual invoice processing and the awkward chasing of late payees?

Whose heart doesn’t sink when a promising project grinds to a halt before the first payment has hit their account? And who’d choose to deal with the everyday uncertainty of unpredictable income?

If you’d prefer to be dazzling clients with your creativity than feeling frazzled over compromised cash flow, Direct Debit for agencies can come to your rescue.

The Cash Flow Conundrum

cash flow agency issuesHubspot’s Marketing Agency Growth Report 2018 found that 29% of agencies see maintaining cash flow as their biggest pain point. And 31% say it’s preventing them from growing as fast as they’d like.

Most worryingly, 57% of those surveyed have less than three months’ cash flow available to pay for salaries and expenses.

It’s a danger that can lurk behind any agency’s beautifully designed website and stylish, inviting office HQ.

If there isn’t enough cash in your coffers, not just today but predictably into the future, your growth plans will be severely restricted. Not to mention your ability to pay your staff, freelancers and yourself.

The answer is to introduce Direct Debit in a billing workflow. By embracing it within a recurring invoice model, its reliability and automation will quickly become the key to income stability.

So, instead of billing on a per project basis, you can use it to charge for ongoing retainers, hosting and development support. You’ll know exactly how much each contract pays each month and be reassured it will arrive in your account when you expect it. Your client will also have a peace of mind that one bill on their list has been paid.

Direct Debit for agencies is your route into the burgeoning subscription economy. An approach built on the power of recurring billing and what Neil Patel calls “one of the hottest strategies in digital marketing”.

Here’s how to use it to deliver undeniable benefits to your business and your clients.

How to Set Up Direct Debit in a Billing Workflow

billing workflowsDirect Debit can easily be incorporated into your agency’s financial operations. It’s straightforward, flexible and will integrate seamlessly into existing processes. No major upheaval is required: you could be collecting payments by this time tomorrow.

Here’s how to do it:

1. Partner with a Direct Debit Bureau

Once upon a time, Direct Debit for agencies simply wasn’t an option. Only larger corporations had access to its benefits through the bank.

Now any business, regardless of size, can team up with specialist bureaux, such as FastPay, who’ll look after the whole process for you. Approved by Bacs, who oversee all Direct Debit schemes, they carry out collections on your behalf, acting as both facilitators and managers.

In exchange for a small set-up fee and low transaction charges, they’ll take away the admin burden of invoice processing and collection through a Managed Service. As part of this, you’ll be allocated a unique Service User Number (SUN), a code given to every organisation which collects money by Direct Debit.

Bacs uses SUNs as a form of ID to record all corresponding transactions. It’s also used by banks to look up the name of each company so they can be included on the payers’ bank statements.

FastPay use unique SUNs for each Managed Service client, meaning that your business’ name and logo, rather than the impersonal name of your bureau, will appear on all documents. They can also personalise your paperwork to consistently reflect your brand.

Once in possession of your SUN you’ll be able to start the collection process straightaway. With FastPay, you can be up and running within just 24 hours of signing up.

2. Collects DDIs

Once signed up, you can start to collect Direct Debit Instructions (DDIs) from your clients. These act as an agreement between you and them that they’ll pay you an agreed amount at regular intervals on an agreed date.

All your clients need to do is complete this mandate, either online, on paper or over the phone, and you’ll have authorisation to start collecting payments. Direct Debit in a billing workflow has begun.

If you’re unsure what information you need to gather, FastPay can guide you through the process and supply branded Bacs-approved web forms, phone scripts and paper mandates to make the job even simpler.

Once you’ve passed on your customers’ details, your bureau will manage the submission of all payment data to Bacs and the money will arrive in your account as soon as it’s cleared.

3. Automate and Integrate

billing automationYour agency depends on clients buying into the marketing potential of the digital world. Taking full advantage of technology is at the heart of what you do for them.

Direct Debit for agencies allows you to do the same for your business.

As it’s fully automated, all you need to do once DDIs have been completed is let your bureaux take care of your regular invoices. With a recurring payment plan in place with your clients, you’ll receive the correct amount on the correct date, at regular intervals.

Instead of managing the minutiae of invoicing week after week, your bureau will email you a daily report detailing all transactions: an up-to-date overview to keep you fully informed. Any problematic ones will be highlighted, giving you the opportunity to deal with them swiftly and professionally.

Armed with this detailed information as well as advice from your bureau, you can quickly take the most appropriate action to resolve any issues. Being able to tailor your client conversations empowers you to deliver great customer service, limit service disruption and crystallise your cash flow.

Errors are rare but you can be reassured that a failed Direct Debit can be recharged within days without any action required by your customer, provided they have adequate funds in their account. And a cancelled Direct Debit can either be reinstated by you with your customer’s consent or by your customer through their bank.

Alongside this convenient automation, Direct Debit can be fully integrated into your existing accounting system, a simple route to transformational invoicing tech.

FastPay can facilitate the integration of their systems with yours using a unique API. And if you use Xero or Sage, you can also integrate your Direct Debit scheme with your familiar software.

Both these solutions give you a reliable, real-time overview of your financial comings and goings, increasing transparency, reducing admin time and improving cash flow efficiency

4. Enjoy Complete Flexibility

As your agency grows and expands its service offer, how much you charge clients will also adapt. And here’s where Direct Debit shines again.

Its flexibility means if you need to increase monthly fees for hosting or development, or set up a new retainer agreement, you can simply adjust the agreed amount. Provided you give your client advanced notice, you can do this without their explicit permission. The ball is well and truly in your court, allowing you to flex payment to precisely suit your needs.

This also applies to ad hoc charges which can be taken by Direct Debit rather than being invoiced separately, reducing time-consuming admin and securing cash flow.

5. Keep Your Clients Happy

While everything is taken care of by your bureau, your clients will quickly start to notice the difference. Direct Debit will reduce admin at their end as well as yours – a welcome bonus for any business.

Reassured that their fees are being paid accurately and on time, and that any problems will be resolved quickly, their trust in your brand, your people and your service will soar.

As their loyalty grows, they’ll become advocates for your agency, spreading the word that paying you is easy, convenient and digitally up to date. The overall experience of working with you will be enhanced, lifting you up above the competition.

6. Enjoy Your Freedom

financial freedomWith automation in place and integration up and running, Direct Debit will revolutionise how you collect client payments. Signed up to paying you regularly, they’ll also welcome the convenience and peace of mind you’ve given them.

Direct Debit will give you freedom to concentrate on growing your agency instead of chasing payments, undertaking time-consuming reconciliation and worrying about cash flow forecasts.

With the extra time at your fingertips, you can fully focus on delivering exceptional creative work for your clients. And with your cash flow challenges solved, you’ll also have the confidence and certainty to accurately plan for the future.

Bored of financial admin? Tired of chasing clients for payment? It’s time to review your agency’s invoicing strategy.

Direct Debit for agencies is your fast track route to efficiency, security and reliability. Your clients will become repeat clients not just in theory but in financial practice. Subscribed to your service, they’ll be committed to your agency.

Trust built, time freed up and cash flow eased, your agency will have every opportunity to grow and thrive.

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