Small businesses are reliant on cash flow, especially when they are starting out, therefore introducing new payment methods into their systems can be intimidating.
However, there are many benefits to businesses implementing Direct Debit payments into their financial plans.
Direct Debits can usually be spread over a period agreed with the organisation you are paying, meaning you don’t have to part with your money in one lump sum.
Organisations often allow flexible payment dates too, which helps small businesses schedule bills and outgoings easily, in a way that suits them.
Direct Debits also come with a guarantee, meaning your small business is safeguarded throughout the process.
Organisations that apply to use the Direct Debit scheme are vetted and also closely monitored by the banking industry.
The Direct Debit guarantee protects your small business should an error occur and is offered by all banks and building societies that accept instructions to pay direct debits, although does not cover contractual disputes between you and the billing company.
The guarantee includes advanced notice of any change in the amount, date or frequency of your payment – normally ten working days of your account being debited.
If any errors do occur in the payment of your direct withdrawal by the billing organisation, bank, or building society, your business is entitled to a full and immediate refund.
You also reserve the right to cancel your direct withdrawals at any time by contacting your bank or building society and notifying the billing company, with notification in writing sometimes required.
As well as offering a safety net for your small business, Direct Debits add convenience to the often hectic life of a small business owner.
Automatic payments mean there are no forgotten instalments, and therefore no late payment charges either.
The approach also lessens workload, reducing paperwork for you or your financing staff, and allows you to know exactly what is exiting your business and when.
As outlined, Direct Debit payments are substantially easier for businesses and consumers alike, meaning many organisations offer discounts in return for you purchasing via direct withdrawal.
While these can vary business to business, they can also add up, meaning a small business can accumulate large savings throughout a year by opting to pay through Direct Debits.