Things to look out for in a Direct Debit supplier
If you’re looking to take advantage of the many benefits of using Direct Debit to collect from your clients, it’s worth considering the main things that a good supplier will give you. They are not all the same and some of the differences that may seem small when you start off, can have a massive effect on how well it works for you in the long run.
Here are the main things you should look for:
Your name must appear on customer bank statements
When your company name appears on your customers’ bank statement, there is no doubt who collected the funds. This avoids cancellations or queries being raised by your customers who may not be certain who is collecting the money.
Funds should be cleared within 3 working days
Once the funds have been collected from your clients’ accounts, you need the money to appear in your account as quickly as possible. The ideal is that two working days after the Direct Debit is collected, funds are cleared to your unique Client Holding Account (this account is for your funds only and is not shared with any other clients of your Direct Debit supplier). Funds will then be transferred into your designated account and will clear 1 or 2 working days after depending on the amount.
No percentage charge
Your Direct Debit supplier should charge a flat fee of no more than 40p per Direct Debit collection and not a percentage of the collection. That way, your costs are fixed per customer – much better than paying a percentage of the amount you collect which means the more you collect, the more you give away!
Any report you like
To help you manage your business better, you may need many different types of report – for example you may require daily, weekly, monthly or occasional reports – and your needs are like to change as your business evolves and you discover which ones are the most use to you.
Automatic re-present service
If a Direct Debit fails (perhaps due to lack of funds in your client’s account) it is a great idea if it is automatically re-presented 10 days if a first attempt fails. This helps keep your admin time down when contacting clients whose payments did not go through the first time.
Client communication service
When you change the amount you collect from your clients, it is important that your Direct Debit supplier writes to your clients for you to let them know of the changes to their billings. This reduces the time you spend managing your Direct Debit service.
You will be busy running your own business so it is important that your Direct Debit bureau is proactive in managing your clients on your behalf. For example they should show you how many customers have cancelled or amended the Direct Debit instruction before they collect using the ADDACS service. This minimises the expense of natural attrition.
Your should look for a supplier who gives you a dedicated account manager who is tasked with making sure your account is running as efficiently as possible and minimising your unnecessary charges.
And finally, before you even start, it is really important that your Direct Debit bureau is knowledgeable and helpful to make sure that you are fully aware of the best way to use Direct Debit for your business. Look for companies that offer a FREE initial consultation such as Eazipay – http://www.eazipay.co.uk