Streamline Web, IT and Telecoms Invoice Collection with Direct Debit

Small web, IT and telecoms companies can be run on the tiniest of margins, so it's understandable that business owners want to focus their time and energy on the things that matter the most - maintaining the existing customer base while constantly looking to expand it to grow the business.  Frequently, these entrepreneurs are bogged down with some of the more mundane tasks of running the business such as running the payroll, paying bills and entering the accounts, so time that could be used to increase income from new opportunities is spent doing paperwork.  While expensive accounting packages can save hundreds of hours when it comes to payroll, invoicing and organising bills, the one thing that always needs to be the focus of attention is managing debtors. 

Debtors exist in all areas of business and the key to managing them is to act proactively and quickly, chasing payments as soon as they become due.  One of the more proactive moves that many web, IT or telecoms businesses can take is to start taking payments by Direct Debit where invoices are collected from customers' bank accounts within ten to fourteen days of the invoice date.  Getting access to the UK Direct Debit scheme through your own bank as a sponsor can be a challenge as more and more banks begin to take a more hard-line attitude to risk by requiring firms to have been in business for several years, have a turnover above a certain amount, and a long-standing relationship with the bank.  In response to these challenges, a number of specialist companies have formed to fill the gap in the market.  These BACS Approved Bureaux already have access to the Direct Debit Scheme and can apply for a Facilities Managed Service User Number (FM SUN) on your behalf which allows you indirect access to BACS Payment Services and gives you the ability to collect Direct Debit payments from your customers. 

On top of this, organising payment collections is a cinch; most Direct Debit providers can accept lists of payments on a spreadsheet, API or via a hosted web portal so that payments are scheduled quickly and efficiently ensuring that collections always goes to plan.  The added benefit is that a Direct Debit Bureaux will have already made the investment into staff training, hardware infrastructure and software licensing so, while the cost per transaction may seem higher, the user is isolated from the initial upfront costs which can easily run into the thousands of pounds. 

Direct Debits work on an exception only basis, which means that everything is assumed to have been received or completed unless it appears on an exception report.  This is particularly true on payments - the only payments that will show on the BACS return reports are those that failed, and therefore the ones where action by the business needs to be taken.  This means that you only spend time chasing funds that are due to you as opposed to matching payments from a bank statement against invoices, depositing cheques, and waiting the week or so that it takes for these payments to clear through the bank. 

For those invoices where payment has not been received, information will be available next working day which empowers you to take swift action - calling or e-mailing customers will often prompt a payment by card or cheque, or you can implement a policy where a failed Direct Debit is automatically represented within a week of the original failure which often increases the collection rate. 

Web, IT and Telecoms companies can clearly reap the rewards in terms of cash flow, time and efficiency savings by moving invoicing to a Direct Debit platform, so why not contact a trustworthy BACS Approved Bureau today and find out how your business can benefit today?