If your business sells a regular service to its clients, then collecting regular payments from them can quickly become a tricky situation every month. Whilst many clients will want to stay on top of their monthly outgoings and always aim to pay their invoice on time and in full each month, the same cannot be said for everybody who would sign up to the service that you provide.
Because of this, it’s no surprise that many service-based companies often find themselves dealing with cash flow issues and chasing up clients to collect money that is owed to them. If your business is finding itself in this kind of situation, then swift direct debit options might be the answer to your problems.
Avoid Missed Invoice Payments
Sending your clients an invoice for their regular monthly payment can be effective with certain individuals, but not everybody will prioritise ensuring that their payment is made in full and on time. Because of this, allowing them to set up a direct debit payment could work out better for everybody involved.
Direct debit payments are taken automatically from the client’s account, without them having to log in or make the payment manually. Because of this, they will have the added convenience of being able to forget about making the payment, and you’ll benefit from it always coming into your business account on time. Websites such as Accesspay.com provide more information on the benefits of using cloud based direct debit to make collecting funds much quicker, which you can read here.
Increase Customer Loyalty
How many times have you set up a direct debit payment and continued allowing the money to be taken out of your account as a force of habit? When you’re able to forget that the payment is being made, you often automatically become more loyal to the company, as you’ll quickly learn to adjust to budgeting with the money that you have left after the transaction has cleared.
Allowing your clients to set up a direct debit with your company can often increase loyalty and encourage your clients to stick around for longer; it’s often more convenient to simply continue paying as normal for a monthly service than to shop around for something else. And, if you’re offering the best deal, then they really do have no reason to think about canceling.
Better Cash Flow Control
One of the main problems that businesses face when it comes to managing money is ensuring that all expected incomings are made. If you’re having to send clients invoices each month and hope that they remember to make the payment manually, then you may be having a hard time in getting the maximum amount of income expected flowing into your account.
On the other hand, with direct debit collections being automatic, your cash flow income is more likely to show up as the full amount expected each month. Don’t forget that direct debit payments will often be attempted after a couple of days if the payment could not be taken the first time, so there’ll be less to worry about in terms of cash flow for you.
Create an Attractive Selling Point
Let’s face it – if you were given the option to choose from a service that required you to pay manually each month or one that took the payment automatically and required you to do nothing except to ensure that you had the funds available, then you’d probably go for the easiest option – even if costs you a little more.
Bear in mind that when it comes to convenience and ease of use, your customers and clients will be exactly the same and more likely to go for the option that requires the least work of them. So, create an attractive selling point to your prospective clients by offering them the most convenient and efficient option for making a regular payment.
Better Relationship with Clients
Speedy direct debit services can actually help to improve your relationship with clients. If a payment is missed, nobody wants to have to be that person who calls the client to chase it, and your clients won’t want to be reminded of any financial difficulties that they may be having at that time. Missed manual payments can put a strain on the business-client relationship. On the other hand, missed direct debits will simply be tried again automatically, and if the funds aren’t still available, you can simply cancel the service until the client decides to re-start it again.
If you found this information helpful, we’d love to hear from you!