Arrange to be paid by Direct Debit

[alison640]

I would like to claim payment for my invoices by Direct Debit? How do I set this up. The wording on my invoice would be similar to that of mobile phone providers invoices explaining that the amount will be taken within 14 days of the invoice date. Obviously I would have Direct Debit mandates sorted initially, I know what is required but don't know how to get started.

Anybody else doing this?

:|

 

[RAL]

Speak to your bank. They will advise on DD.

 

[alison640]

Spoke to my bank some time ago, but the lady I spoke to did not grasp what I was trying to explain, she said it was the company I pay the money to who arranges it, when I explained that it was the other way around that I wanted paying she did not know the answer.

I googled the topic and got nowhere, hence this thread.

Do you think that maybe small/micro businesses are unable to do this???

 

[johndon68]

Setting up to be able to take Direct Debits can be a mammoth task. I was involved in a project a few years ago to setup direct debit processing for a very large software company and the book of rules and regulations put in place by the bank that we had to adhere to was over an inch thick.

It took months to sort out...

John

 

[benjamin_c]

wouldn't it be the same as a gym membership system? i can't see how it can be too complicated :S

 

[alison640]

So, do I need to back to the bank then?

 

[alison640]

wouldn't it be the same as a gym membership system? i can't see how it can be too complicated :S

How does that work then?

 

[accountancyextra]

You can't just set up and take direct debits by yourself. You need to be BACS approved.

Your bank will help you with this, but probably only if you meet certain criteria.

There are a number of direct debit bureaus out there who, for a fee, will do all this for you and then process all the DD's each month/ week on your behalf.

Just google "direct debit payments"

I'm looking at various providers myself at the moment and will let you know if I settle on anyone in particular

 

[alison640]

Thanks Stuart, that kind of feedback would be most helpful, I will google again, and likewise I will let you know what I come back with

 

[GRDCredit]

Alison

I have information on several DD bureaus which I would be happy to pass on but be aware that the process is not complicated but it is expensive - for example initial set up fee £500, further £1.50 for each customer set up and then 1-3% charge for each transaction

There is also a big credit risk to the bureau because of the flexibility of the DD scheme - and so expect to jump through hoops for it.

To be frank if you are talking less than 1/200 customers each month you will not be able to justify the cost and hassle

 

[OldWelshGuy]

Is the Op confusing DD with BACS? It is nigh on impossible for a small business to get DD approval off their own bat. We had a business turning over £30k a week, with no borrowing we owned the building we worked out of, and were told that it wasn't going to happen as DD was meant for large corporations not small businesses.

 

[MyAccountantOnline]

I spent quite a bit of time researching direct debit payments for my clients and in the end opted to keep standing orders due to the costs involved.

If you havent yet come across FastPay their services might be of interest - http://www.fastpayltd.co.uk

Their website also contains some really useful information about direct debits.

Nicola

 

[accountancyextra]

Thanks Nicola,

Fastpay was on my review list, so good to know

 

[accountancyextra]

Fastpay costs are:

£175 or £375 set up dependant upon if you want your own SUN.

Then its 50p per debit

£5 per file submission

£2.50 to set up a new client, although they'll set first batch up for free

 

[KidsBeeHappy]

Why don't you go with continuous authority via debit/credit card?

 

[David Griffiths]

I've seen people collect regular subscriptions via Worldpay. I'd guess that Direct Debit is more suitable if the amounts vary each month, however