Using Direct Debit In Business
Waiting on payments from customers can be one of the biggest pain-points for any small business. UK SMEs are currently chasing over £50 billion worth of late payments, while the average London-based business is waiting on SEVEN payments at any given time. However, it’s not all doom and gloom. There’s one simple change you can make to reduce the stresses of getting paid: Direct Debit.
Just like a personal Direct Debit for monthly bills, a small business Direct Debit set up works in much the same way, ensuring that payment will be made on a set date. Direct Debit removes the need for customers to view, approve, and action any invoices you send, so you don’t need to wait around for clients to authorise payment upon receipt of a new bill – the payment is made automatically.
Direct Debit doesn’t just benefit your business, it brings a whole host of benefits to your customers too – benefits that add to the value and quality of service you’re already delivering.
Here are a few things you can tell your customers about the benefits of paying by Direct Debit through GoCardless.
- You only need to set up payment once – Complete an online form and, unlike with a bank transfer, cash, cheque or card payment, you won’t have to remember to pay next time. Which means no accidental disruptions to your service, subscription or membership.
- You won’t ever need to update payment details – Unless you change bank accounts, you won’t have to worry about updating your payment details either (unlike, if your debit card expires, or is lost or stolen).
- Paying through GoCardless gives you certainty – You’ll know exactly how much you’re paying and when it will come out, which can help with budgeting.
The best news about setting up direct debit, if you use platforms like GoCardless, they can be synced with Xero so all the invoices are handled online and don’t need a lot of attention from you. If you don’t know how to sync GoCardless and Xero, please send me a message and I’d be more than happy to set you up and explain the process.