Direct Debit Best Practice – 5 Tips for Better Cash Flow
If you’re using Direct Debit to collect payments, membership fees, charitable donations or any other contributions, you’ll no doubt be aware of the cash flow benefits of this ever-popular payment method.
Direct Debit gives you the power of knowing exactly when and how you’re getting paid, helping you to plan and forecast cash flow for your organisation.
Now and again though, it’s worth having a bit of a ‘sense-check’- just to make sure you’re not missing any opportunities to maximise cash flow. To help you out, we’ve come up with 5 Direct Debit cash flow tips that should help you simplify matters and let you pay more attention to what really matters the most – ‘growing your business’.
1. Get automated, get AUDDIS
With AUDDIS (Automated Direct Debit Instruction Service), you’ll be able to automatically send new Direct Debit instructions to your customers’ banks electronically, instead of paper format.
AUDDIS improves processes, reduces costs and cuts down on errors – all great benefits that lead directly to better cash flow.
2. Give your customer the perfect date
Offer your customers as wide a range of payment dates as possible.
Putting your customers in control of this important part of the payments process means that they can choose a date that works for them, and by doing so they will be far more likely to pay on time – reducing the frequency of late payments will keep cash flow ticking over nicely.
3. Send advanced notification (it’s only polite)
Ensure your customers always receive advanced notification of their next outgoing payments.
This just serves as a gentle reminder to ensure they have sufficient funds in their account to meet the payment – Your customers will thank you with loyalty when they see you’ve saved them from overdraft fees.
4. Think outside the ‘recurring’ box
Direct Debit can be for more than just recurring payments. Think about using them to take occasional or one-off payments.
Letting your customers make occasional payments is another great way of keeping them in control and giving them additional payment options. And one-off Direct Debit can be a handy alternative to cheques, cash and credit/debit cards. But bear in mind Tip Number 1 here, as you’ll need AUDDIS to accept any one-off Direct Debit payments.
5. Turn ‘unpaid’ into ‘paid’ – painlessly
Always notify your customers whenever you represent one of their unpaid Direct Debits. A reminder could be all they need to get their act into gear, and put sufficient funds into their account so they can avoid pesky bank charges.
And finally, automate your procedures for following up on unpaid Direct Debits. The quicker you can identify those troublesome customers who haven’t paid, the more likely you are to be able to resolve any underlying issues, get paid, and keep a hold of your customers (only if you think they deserve a second chance, that is).
If you think your organisation could better utilise Direct Debit to improve cash flow, give our expert consultants a call for a friendly, no-obligation chat.
AccessPay makes it easy to collect Direct Debit payments
Alternatively, come and chat to us on the AccessPay website – You’ll probably find me [Nizam] on the other side most of the time – We don’t use bots.
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