3 Major Reasons Why Your Business Should Use Debit Order Collections
Once you’ve started a business there are many hurdles new owners must overcome. It is often surprising to new businesses owners how difficult, complicated and frustrating collecting money from debtors can be. After all, you are merely acquiring funds which are rightfully yours.
The smart business owners have however discovered that there’s a very simple and cost effective service you can make use of to automate cash collection. It’s called a debit order collections service.
Once you’ve registered your customers on the system, it will automatically debit funds from their bank account and transfer them over to you, automatically. No calling, or waiting; just receive your funds on the day you request.
It offers three distinct benefits that can dramatically aid your business: making you and your company more effective, optimising your cashflow, and increasing your profit.
1. DEBTORS AND BUSINESSES BENEFIT
Debit orders are a cheaper way of accepting funds than credit cards, as you are charged per transaction, and not based on the value of your transaction (this is called ad valorem and is typically 5%).
Debit orders are also a safer way to collect funds than cash or cheque as all transactions are digital.
By taking the initiative and collecting the money from your customer, you can avoid the needless phone calls and letters typically associated with debtors. Your customer will also appreciate a hassle-free collection method whereby he can continue to enjoy your uninterrupted and on-going service.
2. NO WAITING ON DEBTORS
Instead of relying on your customer to make the time to conduct a manual payment, a debit order process allows businesses to obtain what they’re owed automatically. If you suspect your customer won’t have the necessary funds in their account for the debit to be processed, you can always take advantage of a NAEDO service which will check the customer account at defined intervals and will collect the funds as soon as they become available.
3. SIGNIFICANTLY BETTER CONTROL OF FINANCES
As debit orders are generally collected on defined days and dates you’ll know when to expect money in your bank account, giving you better control of your cashflow. By having control of cashflow, with information on arrival and delivery from debtors’ accounts, you can budget properly. This means you can, for example, purchase important items or services for your business, with the knowledge that the necessary funds will be coming in.
Since you are no longer dependent on another person’s time, but your own, this allows efficiency and productivity – making for a better business and, therefore, increased profit.
In the end, it makes sense not only to use debit order systems but to use it as soon as possible. It is smarter to start having a hold on your cashflow and conveying ease of payment to clients now, rather than later, when the benefits will be less effective.