Direct debit systems have been around for a long time. However, until recently, they have been too expensive for small businesses to implement. Now with online providers and easy to use applications direct debit systems are within the reach of these businesses.
Benefits of using direct debit for small businesses
- Rather than sending an invoice and hoping your customer remembers to pay it when it’s due, normally 30 days later. Small businesses can get a direct debit mandate to take out the invoice amount directly from their customer’s bank account on the due date or at the same time as the service is provided or goods delivered. (Businesses will have to update their terms of payment before doing this)
- Helps subscription based businesses get paid on time
- It ensures good cashflow for small businesses and saves time as you don’t have to chase payments.
- The entire process can be automated using software such as Xero Accounting for invoicing and Go Cardless as the direct debit provider.
- Having a direct debit service is also beneficial to your customers as they don’t have to worry about missing payments, thus making it very convenient for them.
What payments systems suit your business and customers? Contact us if you are unsure.