Direct Debit For Small Business – In 1760, the Industrial Revolution marked the beginning of the Industrial Age. Fast forward to the 1950s and 1970s and the Digital Revolution, now known as the Information Age, Digital Age, Computer Age, or New Media Age.
It was an exciting first time when traditional industries were being replaced by a growing digital, knowledge-based industry.
Direct Debit For Small Business
Today, 90% of UK households are connected to the internet and 86% of adults use it every day. According to recent research, 85% of Brits own a smartphone and 78% own a laptop. Schools are now teaching our children with the latest technology, which takes up about 58% of classroom time. 84% of UK businesses are online and 82% of small businesses (0 to 9 employees) are online.
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These advances in technology and internet connectivity mean that many things that were previously impossible for small business owners, including Direct Debit, are now accessible, affordable and part of everyday business life.
Here we explain why Direct Debit is now the best option for small and startup businesses to collect recurring payments from customers.
Bacs first started direct debit in 1968. At the time, it was only used by large businesses that could afford the service and hire dedicated staff to manage it.
However, technological advances and software improvements over the years have made direct debit available to all businesses, starting with a single employee.
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There are currently two ways for businesses to enter a direct debit scheme: as a direct debtor and as an indirect payer. (This article has more information on both types of inflows: How to set up a direct debit and how to manage it long-term)
Direct Associates have direct access to Direct Debit software licensed by Bacs and manage all transactions internally. Usually large organizations that deal in large amounts of direct loans. Direct suppliers must be accredited by their banks and Bacs.
Indirect exporters are mainly SMEs or small businesses that use Bacs authorized offices to process the transaction on their behalf. This is cheaper than paying for expensive software and hiring and training dedicated staff to manage your direct debit process.
There are now third party providers who specialize in setting up direct debit to access this scheme as indirect providers for small businesses.
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The differences between the services are detailed here, but the approximate cost of the FastPay Bureau Service starts with a one-time payment of 3 times Direct Debit (depending on size). The set-up fee for the FastPay managed service is from £175, with a 10-50p charge (depending on size) via direct debit.
Historically, Direct Debit has taken a long time to set up. But with the advent of new technology, your direct debit scheme can be activated within 24 hours, making it a stress-free and straightforward process. In addition, most direct debit providers provide you with all the documentation you need to easily transition your customers through direct debit payments, including letters and online forms.
In terms of providers, there are several direct debit options for small business needs, so do your research to find the company that best suits your needs.
In the information age, setting up a direct debit scheme is easy and feasible for small businesses. It also has many other benefits: direct debit your payment collection for smaller business productivity.
How To Cash In On Direct Debit For Small Business
Using Direct Debit will reduce your financial management by eliminating invoices, customer contact such as emails and phone calls, and manual entry every time you pay.
Once Direct Debit is set up with your customer, minimal administration is required. Prepaid fees are collected at a pre-agreed time, which can be weekly, monthly or at a convenient time.
Constantly chasing customers for late or unpaid invoices means endless hours on the phone, sending emails or sending letters. The customer often forgets to pay or accidentally transfers the wrong amount.
This processing time can be shortened by switching customers to direct debit payments. An automated system is not only beneficial for you, but also for your customers. They are often busy and generate recurring payments that require no effort to maintain.
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The time saved by not chasing invoices can be better spent on business development or marketing campaigns to grow and develop your business.
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Direct debit means payments are collected on a specific day, so you know exactly when the money will be in your bank account.
Not only do you know when the money will come in, but you also know the approximate total amount. This allows you to review budgets, monitor budgets, and ensure you have enough money in the bank to pay vendors and employees.
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Read more about how direct debit can help you improve your cash flow. Direct Debit Mandate: A Guide to Protecting Your Cash.
Direct debit takes full advantage of the digital age. A fully automated online system that reduces the need for stationery and postage as well as phone bills.
By switching to direct debit payments, you may find that your financial and administrative requirements are reduced, making it easier to combine jobs or turn a full-time job into a part-time job.
The direct debit scheme is run by Bacs. Organizations using Direct Debit undergo a thorough review before collection is authorized.
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All direct loan transactions are protected by a direct loan guarantee. If there is a collection error for one of your direct loan customers, the guarantee means that the customer is entitled to immediate full compensation.
Bacs is also regulated by the UK banking industry and uses the latest security measures to keep the system running smoothly and with minimal security risks from cyber crime.
As a small business, you probably have big ambitions. These wishes can come true quickly. Collecting payments by direct debit can be scaled up as you grow.
You can set up your own direct debit scheme with one or two customers who collect monthly payments. Using a professional third-party provider as a direct debit, you can notify your provider by submitting the correct documentation for any new direct debits, then submit them to collect payments.
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If other customers come forward, you can cancel direct loans quickly and easily with little hassle. Direct debit can grow and develop as you do.
There are different types of solutions for every type of business. Now, there are many A to Z programs that allow different software to “talk to each other”.
As a small business, one of the first things you developed was accounting software to track your income and expenses. Most direct debit providers offer easy-to-set-up links linking their direct debit system to accounting software such as Xero to track payments instantly.
This automation is efficient, accurate and simple, helping to reduce time spent on financial management and human error from data.
What Is Direct Debit?
As a small business owner, you want to focus on growth and productivity. Integrating different software to automate processes, make them work seamlessly and use the latest technology should be a priority. Now, with a wide range of Direct Debit for small businesses, you can find a provider to suit your needs.
Whether you’re collecting customer payments in cash, taking card details over the phone or waiting for a bank transfer, you could be one step behind your competitors.
Don’t be left behind, embrace the Digital Age and choose Direct Debit for your small business financial success.
We have been using FastPay LTD to collect direct debits since our companies inception 6 years ago. We have found them to be a proactive, efficient and professional team who always deliver on their promises.
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Thank you to everyone at Fastpay for your work this year. We have to say that we have had no problems with our direct loans and the system is working very well.
I would like to thank you and your team at Fastpay for all the help, support and advice you have given us recently with our direct debits at Fastpay. Your team has been amazing and has helped me and my team with any challenges that have arisen.
For exact prices or more information about our services, please fill out the form below. It offers a direct payment system that allows your customers to make scheduled payments and order directly from your credit cards.
Uses every pricing method for online payment method. A transaction fee will be applied to direct debit payments.
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A direct online system allows your customers to make frequent payments on their own