Accepting Direct Debits ??

If I had a number of clients, paying monthly and quarterly amounts, all quite small, am I best looking at setting up Direct Debits, or is there an easier/better way to accept these?

I will still have to accept cheques, Paypal via a site, cash, etc too.

All companies will be reasonably local, and they would have a choice on paying monthly or quarterly for our service offered.

The amounts would be small (£10-30 each transaction), but there might be spurious amounts in the £100-300 range too, but only a few each month.

Ideally, I'd like to send out a form, with a Direct Debit Mandate enclosed, to make everything simple, but I will also offer the other payment options mentioned above for those internet-orientated, or still using cheques/cash.

Anyone done this, who can give me a brief synopsis of how to go about it, before I go see the bank to ask for info??

 

[Williams lester]

Unless you have a pocketful of cash, you may want to start out with standing orders rather than DD's. Setting up a SO is simple just get a template form which the client fills in their bank details and signs and sends back to you. You then forward this to the clients bank.

Btw, if you need a standing order template let me know and I can e-mail one to you.

 

[GRDCredit]

DDs are preferable to standing orders but can be expensive if you only have a few.

Most DD bureaus will charge you c40/50p per transaction but there is a largish set up fee - what volume are you talking about each month?

 

[stugster]

Hi Mark,

I looked into this, and my mate Barry is pretty clued up about it. Unless you're collecting >1000 payments a month, it's just not worth the costs/hassle.

As much as I'd love to do it, I just can't support/finance such a system - so instead, I use Standing Orders, PayPal Subscriptions, and Bank Transfer.

The other thing I'm about to do is just start taking all business client payments quarterly, rather than monthly - this obviously helps a lot with admin

 

[TotallySport]

If you have credit card facilities there is a scheme on those which might work, although I am not 100% clued up on true sibscriptions, but if you ring you merchant account providers and ask for information on recurring transactions, it's designed for things like subscriptions, but we are using it for 1 press purchases, so the user doesn't have to keep entering their card details everytime the purchase from us, and we don't retain their card details.

I think the main difference between what I am using it for and what you would be setting it up for, is you have to inform the person your taking money, so many days before you take it, where as I don't as they are actioning the payment. But you would need toclarify this.

Protx and streamline both support it as do most of the merchant accounts but it does get called different things.

Hope that helps, sorry of it doesn't

 

[scudulike]

We just moved over from SO to DD, mainly due to the VAT rate change in January meant every client would have to adjust their SO

DD is preferred, as it keeps it flexible for us & carries a guarantee for the client. Reasonably simple setup, although it cost a couple of hundred to register - from then on in it's about 32p per DD collected.

Hope this helps

 

Thanks all, you have confirmed my worst fears

All in all, there could be about 600 subscriptions, some will pay monthly, others
quarterly.

It sounds as if there might be too much involved in going DD route, but the SO option sounds like a good one, if this is as easy as described.

If I go the SO route, do I just send a normal SO form (not unlike the DD form I suppose) and then forward this to their bank in the normal fashion?

Dave, I'd take one of those templates you so kindly offered, and have pm'd you my email address, thanks

 

[DaveSUK]

Before move our direct debit in house we used http://www.fastpayltd.co.uk/ it was £500 set up then a fee per collection run so if you collect direct debit once a month you pay this fee once a month if i remember right it was £8. plus 45p per collection.

The also have a small business option where the set up fee is lower £250 but the account charges are slightly higher.

 

[GRDCredit]

Thanks all, you have confirmed my worst fears

All in all, there could be about 600 subscriptions, some will pay monthly, others
quarterly.

It sounds as if there might be too much involved in going DD route, but the SO option sounds like a good one, if this is as easy as described.

If I go the SO route, do I just send a normal SO form (not unlike the DD form I suppose) and then forward this to their bank in the normal fashion?

Dave, I'd take one of those templates you so kindly offered, and have pm'd you my email address, thanks

Slow down - on that sort of volume I would say DD could well be cost effective. Have a word with fastpay as previously mentioned

When considering the costs think also of the savings. The VAT example given is a good one - if standing order you would now be writing to all your customers asking them to increase the standing order. 80% would so you would then be chasing the rest. DD - it's just done by you!

Also you don't have to check everybody pays - you just get notified of the ones that bounce

If you need any help drop me a PM

 

Thanks Geoff

The increase in rate is something which would happen each year anyways, and the subscriptions could run for more than a year too, so that is an important factor.

Initially there might only be 200 or so, but this will increase to 600-800 in a couple of quarters quite easily.

I'll speak to fastpay and my bank, and see what they suggest. I'd like all of this automated as much as possible, as the business project cannot get bogged down worrying about a load of small payment amounts, there are much more pressing aspects to cover.

I really do not want to sit and wait on a load of small cheques etc coming in, as the subs will relate to a quarterly service, which if not paid for in advance they will be excluded from, which would then open up a whole can of worms for cheques late being delivered etc, and potentially a load of admin work I do not want.

Cheers all for your input, I have a lot more to think about on this... glad I asked the question now