Each year more businesses in the wholesale, distribution and manufacturing industries move to Direct Debit to improve their cash flow and reduce admin. If you deal with a large number of regular clients, it could help you too.
GoCardless helps wholesalers, distributors and manufacturers of all sizes and in a variety of industries to collect fees by Direct Debit. In particular, Direct Debit can help you in two ways:
- Safely offer payments on account
- Reduce late payments
Direct Debit lets you safely offer payments on account
Customers often ask to pay on account, but without a guaranteed way to collect payment, it’s not advisable to offer large amounts of credit. If it’s not managed properly, offering credit to customers can put your company at risk and damage your cash flow. Once you have completed a credit check on the customer, Direct Debit provides a safe way to start taking payments on account.
Direct Debit reduces late payments
60% of SMEs with serious cash flow issues blame late payments. Without a reliable cash flow, growing your business becomes difficult – especially if you’re in an industry with a short buying season or where you depend on a small number of ongoing relationships.
Has Bean Coffee, the UK’s leading premium coffee distributor, switched to GoCardless to help them deal with invoices being paid up to four months late. Late payments made it difficult for them to buy enough coffee beans for the year.
Since using Direct Debit with GoCardless, the average payment term has dropped from 62 days to 41. Steve Leighton, the owner of Has Bean, says, “Now we have control over when we get paid, and we can keep uncomfortable conversations about money to a minimum.”
How to get started with Direct Debit
You can start taking Direct Debit via a bank, bureau or GoCardless. GoCardless is the UK’s leading Direct Debit payments provider. It lets you automate the whole payment process and manage everything online. It offers:
- Quick and easy sign up. You can sign up instantly and for free.
- Easy and efficient management. You can collect recurring and one-off payments automatically. GoCardless integrates with the most popular accounting packages (e.g. Sage, Xero and KashFlow to enable easy invoicing and payment reconciliation.
- Simple, low pricing. All it costs is 1% per transaction, capped at £2. Scale pricing is also available.
If you would like to find out more about accessing the Direct Debit system you may find our 60 second guide to Direct Debit providers helpful.‹ View table of contents Next page ›