Direct Debit Solutions: 10 Point Guide To Credit Control & Accounting

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A day in the life of a credit controller can often read like a repetitive list of chores: chasing, checking, chasing again. Endless spreadsheets to study, dozens of phone calls to make.

Direct Debits solutions can ease the burden.

In accounts departments around the world, traditional ways of processing payments and managing cashflow are being replaced by hard-working solutions such as Direct Debit collection services.

By outsourcing your payment collections to a Direct Debit bureau such as FastPay, you’ll embrace a whole new way of working.

But why is the old way heading for the highway? And how does Direct Debit for businesses help to radically streamline your credit control?

1. Automated Accounting

If your accounting systems are more 20th century than 21st, it’s time to start playing catch up.

automated direct debit solutions

Payment tech is revolutionising the way businesses and their customers exchange cash. The cheque book is inching towards its final resting place, the Standing Order is stubbornly clinging on despite its inflexibility, even cash is fighting to compete.

Instead, consumers are choosing the most efficient method available to them for the purpose. Whether that’s a quick flash of their contactless card to buy a morning coffee or a set of Direct Debits to efficiently and reliably pay all their regular bills.

Over 4bn Direct Debit transactions took place in the UK in 2016: the third most popular payment method after cash and debit cards.

Offering Direct Debit solutions will not only improve customer relations by making the payment process simpler, it will fully automate your accounts system, bring you in line with your competitors and launch your business into the digital age.

2. The Cashflow Challenge

Outstanding invoices aren’t just an admin hassle, they can also impact your cashflow, creating unnecessary financial insecurity for your business.

While your accounts team are spending precious hours chasing late payments, you’ll also be facing the uncertainty of whether you can meet your own commitments.

direct debit cashflow solutions

Using Direct Debit collection services for regular income such as subscription payments removes these cashflow challenges.

You’ll have the reassurance that your customers will be paying a predictable amount on a regular basis. And if a payment fails, you’ll find out quickly so you can effortlessly resolve the issue.

The cash appears in your account as it should, when it should.

3. Flexibility to Reduce Financial Frustration

Standing Orders have traditionally been the go-to method of making regular payments. If they still play a starring role in your accounts system, it’s time for them to take a bow and exit stage left.

Compared to Direct Debit, their inflexibility can crush your cashflow and give it a nasty surprise when they’re mysteriously unpaid or cancelled.

And if you want to make changes to the amount or payment date, the onus is on the customer to do this via their bank. And there’s no knowing when that might happen.

With Direct Debit for businesses, the ball is in your court. Full control and no frustrating payment no-shows.

When a Direct Debit mandate is in place, you can alter how much is collected and when, provided you notify your customers.

Not only is this more convenient for them, it leaves you with fewer potential problems to resolve. You can adopt a proactive approach to your accounting while focusing on other aspects of the business.

4. Predictable Pay as You Go Pricing

By choosing to appoint a bureau to manage your Direct Debit collection services, rather than setting up an expensive scheme through your bank and running it in-house, you’ll instantly save thousands on set-up costs.

FastPay offers a transparent and affordable pricing structure which means fees for your Direct Debit solutions can easily be predicted, again saving your business time, effort and uncertainty.

Your accounts team will be presented with regular, straightforward invoices. And because fees are charged separately as a total, rather than from each individual collection, reconciliation is a breeze.

The amount you pay for a professional service to collect regular income such as subscription payments can be as low as 3p per transaction. This will quickly be recouped through a dramatic reduction in admin hours.

5. Regular Reporting to Resolve Issues Quickly

The old way involves time-consuming processing and reconciliation: who’s paid what, when and how? Who hasn’t paid? Is cash going to stop flowing?

direct debit account reports

With Direct Debit collection services via a bureau, you receive swift, automatic notifications about any problematic payments: bounces, failures and cancellations.

This comprehensive breakdown of all payments, including successful ones, allows any issues to be tackled efficiently. You stay in-the-know and fully up-to-date with all the comings and goings of your account.

Hassle-free, helpful information straight into your inbox.

6. Integration with Your Accounting Software

The digitalisation of payment collections will contribute significantly to streamlining your credit control.

Making the switch to Direct Debit will result in straightforward, automatic reconciliation.

Your online payment gateway is linked to your online accounts system and to your bureau’s Bacs-approved software. Seamless connections for instant streamlining.

Direct Debit solutions unlock the full potential of your business by allowing you to integrate as much or as little as you like via APIs and platforms such as Xero and Sage.

Embracing this technology opens up a whole world of digital possibilities. All transactions flow effortlessly within the system, increasing payment efficiency, saving admin time and giving you a real-time cash overview.

Your accounts team can say farewell to double-keying information into two different programmes, the high risk of data entry errors and repeated exporting of spreadsheets.

When combined with the logic of Direct Debit, the power of these integrations will boost your business growth exponentially.

7. A Saviour for Your Staff

If morale in your accounts team is running on empty, Direct Debit for businesses could give them a much-needed boost.

The unpredictability of payment systems such as Standing Orders, cheques and credit cards can leave them with daily headaches from chasing customers and time-consuming reconciliation tasks.

These unnecessary demands can distract them from other areas of the job which would better serve your business.

Introducing Direct Debit as a payment option will ease the administrative burden faced by your accounts department. The automation of many day-to-day processes will reduce the chances of human error, reduce paperwork and improve efficiency.

They will be able to focus on the task in hand armed with clear, up-to-date information provided by your Direct Debit bureau partner.

8. Straightforward Set-Up Process

Switching to Direct Debit to collect subscription payments, membership fees and other regular customer income is simple and quick.

Your accounts team won’t be overwhelmed by paperwork and endless additional admin jobs just to get started.

Beyond collecting the Direct Debit mandates required to set up a scheme and introduce new members, there is minimal set-up work for them and your business.

FastPay, for example, can get you up and running in just 24 hours. They offer advice and Bacs-approved documents to sign-up new customers online, on the phone or via a paper mandate.

You’ll soon start to wonder how you ever managed before.

9. Concentrate on Customers

Automating payments via the power of Direct Debit will free up your account team to focus on your individual customers’ needs.

With many potential payment pain points gone, they can build customer relationships easily and resolve any issues efficiently.

Direct Debit’s simplicity works to reduce possible customer conflict: gone are the days of hearing the classic “the cheque’s in the post” excuse for late payments.

It’s easier to help customers clear their arrears by arranging for them to spread the cost – reinforcing your business’s helpful reputation – and re-presenting bounces has a 90% success rate so you can keep providing them with a continuous service.

10. Security for All

Alongside the strict regulations imposed by Bacs and your bureau’s sponsoring bank, a unique guarantee also covers Direct Debit collection.

The Direct Debit Guarantee protects customers if on a rare occasion there’s an error when processing your payment. Unlike Standing Orders which aren’t guaranteed by any financial body, all Direct Debits are covered.

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