At AIMS Accountants for Business, we ask our clients to pay by Direct Debit. Why? Because it has advantages for both them and us.
We asked Nick Udall, Head of Marketing at SmartDebit, to outline how clients can benefit from Direct Debit payments.
In 2019, Bacs, the controlling authority for Direct Debit in the UK, confirmed 4.5 billion Direct Debits were made. There were over 124 million for Business to Business (B2B) transactions and over 500 million for subscription services. With 9 in 10 UK adults holding at least one Direct Debit payment, it’s generally accepted as the most widely recognised way to pay for recurring services. This is because it has clear advantages for both parties in a transaction. One example is the protection offered by the Direct Debit Guarantee.
What is the Direct Debit Guarantee?
One of the major benefits of paying by Direct Debit is the protection it affords you beyond other methods. Whenever you sign up to pay for services by Direct Debit, you are protected by the Direct Debit Guarantee.
The guarantee is offered by all banks and building societies that accept instructions to pay by Direct Debit. The guarantee provides complete protection from payments made in error, allowing you to claim all funds from the collecting organisation.
What are the other benefits Direct Debits?
Collecting and storing Direct Debit instructions correctly protects organisations that collect Direct Debits from their clients against wrongful indemnities, so both sides benefit from the protection offered by the guarantee.
Additionally, clients paying by Direct Debit benefit from a number of enhancements:
Increased cash flow – You know upfront how much you will pay and when that money will leave your account – every month, forever. This improves forecasting and budgeting accuracy, supports medium-term planning and allows you to optimise your outgoings. It also means that your large one-off costs are spread throughout the year, giving you more financial freedom.
Reduced cost and complexity – Direct Debit removes a lot of the manual effort from paying bills, as it is all taken care of automatically without the need for regular administration, saving you valuable time.
Improved User Experience – Clients expect to pay by Direct Debit for recurring services. The average UK adult already pays more than five organisations by Direct Debit. Offering Direct Debit as a payment method is important in providing an easy to use service for customers.
SmartDebit are the UK’s leading Direct Debit service provider, with over 20 years’ experience, creating recurring payment solutions for companies and organisations of all sizes. AIMS have partnered with SmartDebit to provide a best in class Direct Debit services to our clients.
Get in touch with your local AIMS Accountant for a no obligation meeting.