For a company that sells products or services on installments collecting payments can take a lot of time and resources. Many customers avoid payments or simply forget to pay on the due date. This situation can hamper the companies cash flow and also hinder any expansions that may be in the pipeline. If you wish to overcome this troublesome scenario direct debit may be your best solution.
What is direct debit?
Direct debit is something many of us have heard of and may have at least one active and attached to a bank account. It is where companies work with banks to automatically collect a certain amount over a prearranged time frame. When a product, service or subscription has been purchased, the customer will give authority to his or her bank to send the agreed payment to the company that provided the product or service. It can also come as a periodical request from the service providers bank. The customer will have to agree to this when the item or service is purchased.
Who can use direct debit?
While all customers can make use of this, banks and larger financial institutions will only allow the bigger companies to make use of such procedures. For smaller companies, getting direct debit payments organized can be extremely tough. However, with direct debit collection services, this is no longer an issue. Smaller businesses can now get the direct debits set up for their customers with companies that will make the debt and remit it to them on the same day and even before.
Here are the benefits of using such a service
Payments can be received on time, and it will not hamper your cash flow. When this happens, you will not have to chase behind customers and wait to cheques to clear or arrive in the mail.
Direct debit services can also offer you cash advances or loans which can be ideal for times when you are having liquidity issues and want to get a new stock of items etc. If you have regular payments that are due to come in from clients, these direct debit services will be happy to grant you a loan against your future income. You will not have to place any collateral or worry about a bad credit history as it will not be taken into consideration for such loans.
Direct debit services can help a small company expand and reach their goals without being stuck for cash.