As a business owner, you’ve probably heard some of the same old excuses from customers for not paying you on time. “It must have slipped through”, “I haven’t seen that invoice yet”, or that golden oldie “The cheque’s in the mail”. Using direct debit is a very simple way to avoid all these excuses, take control of payment collections and improve your cash flow.
Placing your customers on a direct debit payment plan allows you to regularly draw payments from your customer’s bank account or credit card. Once your customer authorises the payments to be collected, payments are automatically debited from their account, providing total control over your payments.
Improve cash flow
One of the biggest benefits of direct debit is that it delivers a constant and regular stream of payments that improves your cash flow and provides greater certainty for your forecasting. Because you’ve agreed with your customer when and how much will be paid, you know exactly what’s coming. With greater cash flow certainty, you can focus on other things, like running your business.
Setting up your customers on direct debit can also save you valuable time and money. There’s no more need for you or your staff to chase late payments when customers are automatically paying you regularly and on time. When you take these time and cost savings into account, direct debit is probably the most cost-effective method to collect payments from customers.
Better for your customers
Offering direct debit makes life much easier and simpler for your customers as well. Instead of having to take time out of their day to pay you, you are giving them an automated method that does everything for them after the initial set-up. Without this regular effort to make a payment each time, you’ll find this will lead to increased customer retention.
And with less effort required to keep existing customers with you for longer, you’re freed up to chase new customers and keep your business growing. Direct debit is also another way to break up larger one-off payments into smaller, more manageable amounts for your customers, creating a regular income stream across the year.
How it works
The first step in getting your clients paying via direct debit is chatting with a specialist provider in recurring direct debit payments, like Ezidebit. They’ll provide you with the systems and paperwork needed to set up an automated payment schedule with your customers.
Your customers then complete and sign the application form authorising your business to deduct the agreed payments at the agreed intervals as per the schedule. Once the customer’s bank receives the authorisation, payments can start rolling in from the agreed start date.
Direct debit is one of the simplest and easiest ways for businesses of all size to take control of their payments, improve their cash flow and retain customers. So if you’re still getting overdue payment excuses, may be you should consider direct debit for your business.
Ezidebit is Australia's leading payments solutions provider. Check out our direct debit solution here or call us on 1300 763 256 to find out more.