These days, business is moving faster than ever before. We expect fast responses and automation of tasks. The accounts team is no different...
Here we take a look at some common questions and concerns relating to getting paid faster and automating collections using direct debits.
How can I get paid faster?
The quickest and most cost-efficient way to collect payments is via Direct Debit. This gives a business the ability to determine the exact date of payment collection, the exact amount and therefore can help to help Financial Controllers manage current cash flow. It also means less time spent on chasing payments and more time spent doing other productive tasks.
What are the drawbacks?
It's not all plain sailing and there can be drawbacks. The main one being the lack of speed involved in manual direct debit processing. Depending on the number of direct debits your business accepts, this can take a number of days to process just an average volume which in turn will add to your business costs. Manual processing can also result in errors, which can add even more time to the data entry process as these will all need to be re-run.
Will a direct debit solution work for my business?
The quick answer is "it depends". Ideally if your business collects money from the same customers (e.g. trade customers) on a regular basis, then yes accepting direct debits can be a very effective way of getting paid faster. Businesses from wholesale/distribution through to telecommunications and service based organisations are benefiting from a direct debit collection model.
How much time could I expect to save?
This will depend on a few things, primarily transaction volumes and whether or not your direct debit solution integrates with your back office accounting software.
From our experience implementing our easydd solution, we have noticed savings of anywhere between 2 and 3 days. All of the manual processes are taken out of the equation and it's just a matter of following a set process to get you from A to B. Handing rejections can also add to your time, so being able to manage rejections swiftly and efficiently is important.
Is it easy to get started?
Yes. First, you must be a direct debit originator. You will need to set this up with your bank. Then, it's just a matter of finding the right solution to meet your needs. Integration with your accounting software should also be taken into account - no messy manual intervention is the best way to go.
Does this ring any bells?
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