As a businessman, I always wondered how I could avoid late payments from my customers. Luckily, many online resources helped me learn how to set up direct debit for my customers, and I found this automated payment method very effective for my business.
You can set up a direct debit over the phone, through online banking, or using a Direct Debit Instruction form. If you have set up a direct debit instruction for your business, you can also benefit from its effectiveness and receive payments from your clients at any time. All you will need to do is submit a payment request through your banks and notify your customer in advance.
Let’s take a look at the primary steps of collecting payments from your customers here.
- Notify Customers of Payments
Setting up a Direct Debit instruction with your customers allows you to collect automatic payments from them at the due time. However, it requires you to notify them through an advance notice. Your customer must know about each payment before you collect it from their bank account. The same thing goes true if you need to collect varied payments, either in amount or frequency. It will be essential to send an advanced notification to your customers of each one, containing the payment amount and detail.
- Submit Payment Requests
You can use any reputable financial channel to submit payment requests to the banks, including your sponsor bank, as well as your customers. Your bank will credit your account on the day of the payment. Similarly, your customer’s bank will debit theirs. Subsequently, these banks will then settle up the needful between themselves.
Thanks to the Direct Debit Guarantee, you can request a refund for the direct debit payment collected from your bank account at any time. Although there is a minimal rate of 0.2% payments that receive such requests, it is imperative to understand how it works.