What is direct debit payments for small businesses?

The absence of unpaid receipts and late payments is a golden scenario for any business. With the auto debit payment gateway, your business can be sure to get paid on time for the delivered products and services.

This means that your cash flow becomes healthy with a regular flow of income and this, in turn, strengthens the business’s working capital. All operations can be carried out smoothly, which ultimately creates a profitable business.

With direct debit payments, all your payments can be completed faster than usual. Once you establish the terms of the payment cycle and rules for pulling funds from their account, there is nothing that can delay the process.

Other forms of payment usually take a lot of days to be processed and approved. As with the direct debit payment method, you have access to the customer’s account, there are no hurdles in the process — you just have to make sure to send the 10 working days' notice, well within time.

Direct debit payments can make your products or services more affordable for your customers. If you deliver high-value services, it can be difficult for your customers to pay a huge sum of money all at once.

Using the direct debit payment solution, you enable your customers to pay you smaller payment amounts at regular intervals.

This is beneficial for both parties, as the customer won’t have to discard a huge chunk of money from their account in one go, and your business will keep having a regular flow of income.

Using direct debit payment solutions can help you a lot of time. All those hours spent chasing down your customers to get payments are easily eliminated through automation.

Also, if you get an accounting integration along with the direct debit payment method, all your payments get automatically reconciled. This means you don’t have to manually spend time checking payments against bank statements.

If you are a business that provides subscription-based or rental services, your work can become absolutely hassle-free with direct debit payments; as the payment method becomes automated, you don’t have to run behind your customer and send them repeated requests to make payments.

With an irregular inflow of income, making any business decisions or setting any future ventures for the company can be difficult because you never know when suddenly a customer might not pay, and you will be short of funds.

But with direct debit payment solutions, you can be sure of a stable and regular income for your business, using which you can make better forecasts and decisions.

To choose a direct debit provider, you can take recommendations from other businesses which use this payment method or research on your own.

To save time and eliminate any hassle, it is best to choose a provider that can easily integrate with your accounting software for smooth reconciliation.

Once you set up a provider, the next step is to ask your customers to pay you using the direct debit payment method.

You can do this by first identifying those customers who are usually late in making payments and using bank transfers, cheques, or credit cards to make payments.

Focus your energy in convincing them. You can also include CTAs in your invoices saying “sign-up to make direct payments” or include an Instant Bank Pay link.

Remember to apply a timeline to this scheme by stating that customers using direct debit payments can enjoy numerous benefits. List those benefits and mention a deadline to create a sense of urgency.



You can request either one-off or regular payments using the direct debit payment system. The tool you choose should give you the ability to schedule and plan payments, and it is best to have it integrated into your billing system.

Your customers must have advanced notice of the payments sent well within time so that they can make sure that their bank accounts have enough funds for you to withdraw as a payment. 

Related read: Best practices to manage your accounts receivables

Direct debit payments can also be made through credit or cards. But for most companies, it is easier to make a bank-to-bank transfer, as it is easier and cheaper, the rules don’t expire, and it is the most reliable way of money transfer.

The direct debit payments provider you choose must be able to onboard you quickly and also your customers so that the whole process of payments can start as soon as possible.

Usually, the sign-up should be free, and you should be able to take direct debit payments within minutes.

The whole purpose of installing a direct debit payment system is to get paid quickly and eliminate any extra fees like late payment fees.

Now, if your provider only starts charging extra costs or hidden charges, the grounds for choosing this method are defied. Hence, choose a provider which is transparent about their fee structure and has no extra costs attached to the plan.

The provider you choose is supposed to help you in automating the auto debit payment gateway and make your life easier.

The right provider would have a smart technology automated system that would flag any errors, catch any double entries, make reconciliation automatic and help you save numerous hours of the day.

Direct debit payments are a smart solution for faster and safer payments for both the business and the customer. However, saving time on transactions and spending it on accounting reconciliation and billing systems is foolish.

So, choose a provider which can seamlessly integrate with your accounting software so that all the manual reconciliation gets eliminated and automatic reconciliation takes the lead.