If you’re using Direct Debits to get paid by your customers, you’ll no doubt be aware of the cash flow benefits...
Direct Debits give you the power of knowing exactly when and how you’re getting paid, meaning you can plan and forecast better, which leads to better cash flow for your business.
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 your cash flow. To help you out, here are 5 Direct Debit cash flow tips:
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 in paper format.
AUDDIS improve 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 customer as wide a range of payment dates that you think you can cope with.
Putting your customer in control of this important part of the payment process means that they can choose a date that works for them, and by doing so they will be far more likely to pay promptly – and problem-free payments keep your cash flow ticking over
3.Send advanced notification (it’s only polite).
Ensure your customer always receives advanced notification of their next outgoing payment.
This just serves as a gently reminder to ensure they have sufficient funds in their account to meet the payment.
4. Think outside the ‘recurring’ box.
Direct Debits can be for more than just recurring payments, of course. Think about using them to take occasional or one-off payments.
Letting your customer make occasional payments is another great way of keeping them in control and giving them added options. And one-off Direct Debits 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 customer 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 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
customer - if you think they deserve a second chance, that is!