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How to prepare your business for Direct Debit

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As Global Head of Content Marketing, Chris oversees all of the content requirements for our organic, growth marketing, and demand generation campaigns. This requires a fundamental understanding of the pain points our customers are experiencing and a thorough comprehension of the ways those customers consume and engage with content. A growth marketing expert in the tech space, Chris has worked with complex global businesses such as Google, AWS, Microsoft, SAP, Adobe, Dell and Oracle to grow their most valuable customers, increase revenue and speed up deal cycles. He has also led on customer lifecycle management programs and account-based marketing strategies for BlackRock, EY, Grant Thornton and UBS. ConnectSee full bio

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David and his team manage relationships with banks, scheme providers, and other parties involved in payment transactions in the UK and Scandinavia. David has worked in the finance and payment industry for over 12 years, primarily focusing on the BACs and Faster Payments schemes. He has sat on governance committees and chaired cross-government public sector working groups. David is also a regular attendee at the SIBOS and MoneyLIVE financial conferences. ConnectSee full bio

Last editedApr 20232 min read

This guide walks you through how to prepare your business for taking payments using Direct Debit including Direct Debit software, payment failure processes and additional requirements for paperless Direct Debit.

Once you've obtained a SUN, you need to prepare your processes and staff to manage your Direct Debit payments. This process involves four key changes and normally takes 3 – 6 months. This guide will focus on walking you through how to prepare your business for taking payments using Direct Debit.

How to collect Direct Debit payments with GoCardless

1.

Create your free GoCardless account, access your user-friendly payments dashboard & connect your accounting software (if you use one).

2.

Easily set up & schedule Direct Debit payments via payment pages on your website checkout or secure payment links.

3.

From now on you'll get paid on time, every time, as GoCardless automatically collects payment on the scheduled date. Simple.

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Preparing my business

The following four steps will help you to prepare your business and minimise errors and the risk of chargebacks under the Direct Debit Guarantee:

Set up new software for submitting payments and downloading reports. This software must be supplied by one of the 19 providers approved by Bacs. Bottomline and Finastra are two of the biggest.
Create a process for generating payment submissions. You will need to generate a CSV file of the payments in each run. Automate this process as much as possible.
Create a process for handling payment failures. 3-5 days after you submit a payment run, successful payments will settle into your bank account. Bacs will notify you of any failures and chargebacks using codes in ARUDD, ADDACS and DDICA reports which you can download through your new software. You will need to establish new processes for:
- Interpreting these codes
- Updating your records
- Notifying and resolving issues with customers.
Hire and train your staff on the Direct Debit scheme rules, and how to use your new software and processes. Staff will need re-training whenever the scheme rules are updated. Updates usually take place at least every 2-3 years.

Want all the benefits of Direct Debit but without all the hassle & expense of dealing with banks?

GoCardless does all the heavy lifting for you so you can collect payments on time every time with just a few clicks!

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Paperless Direct Debit

If you'd like to use paperless Direct Debit there are some additional steps you will need to take:

Have live AUDDIS status. You must have completed an AUDDIS and a Paperless Direct Debit application form. These will be issued by your bank.
Meet AUDDIS and Paperless Direct Debit criteria. These must be met before an application is signed off and will include technical, financial checks and the execution of a new indemnity.
Implement Paperless Direct Debit system amendments. You should ensure that system amendments for AUDDIS incorporate Paperless Direct Debit requirements.
Get paperless Direct Debit material approved by bank. Any scripts, confirmation letters, Internet screens and any other material must be approved prior to use.
Implement sign up confirmation. This could be a voice recording or email confirmation. This will assist you in dealing with customer queries.

If you would rather not have to undertake these steps then your other option is to find a Direct Debit provider like GoCardless who can take care of all of this for you.

GoCardless is a completely automated Direct Debit payments provider. You can easily take, track and automatically reconcile your payments online with GoCardless, through our simple dashboard or REST API.

Not sure what the best option for you is? Check out our 60 second guide to accessing Direct Debit, or, try reading our overview of Direct Debit for small business.