5 reasons to start taking payments by Direct Debit

Many businesses choose to automate payment collection through Direct Debit: but what exactly is the benefit?


Collecting your business payments by Direct Debit, means you can set up payment once with a regular customer, and then automatically pull payments from their bank account each time a payment is due – allowing you to reliably ensure you get paid on time.

It also removes much of the admin associated with other payment methods, making it an efficient, hassle-free way to control cash flow, while freeing up your time to spend on more important things.

In this guide, we look at 5 ways Direct Debit can benefit your business.

1. It gets you paid on time

With Direct Debit set up, the whole process of payment collection is taken care of automatically so your clients won’t miss paying you again.

You still offer your regular payment terms, but when the due date is reached you are authorised to collect the fees straight from their bank account. That means less disruption, no awkward chase-up emails and no embarrassment for your client when being asked to pay their bill on time.

2. It frees you up from admin

Processing payments can be an admin heavy task. Cheque payments need to be cashed and bank transfers or standing orders require you to monitor your bank account to confirm you’ve received payment.

Credit and debit cards promise a swift way to take payment but are expensive and typically have failure rates above 5%. Cards have a habit of expiring or being cancelled and this means extra work chasing up your clients to get new details.

With Direct Debit, once a client is set up, all of their future payments are taken automatically without either of you needing to lift a finger. And if the payments are set up to come from your clients current account, they’re much more reliable too - so you don’t have to worry about updating customer payment details.


“It’s important for me to spend time with clients and GoCardless has allowed me to do that, by reducing the time I spend on admin. You set it up once, and now I don’t have to touch it – it happens automatically: automatically paid and reconciled.” Heike Northey, Owner, All Things Sorted


3. It's flexible

With Direct Debit you can charge both fixed and variable amounts. This accommodates for any changes in fees or additional costs for one-off or ad-hoc projects. You can also change the date and frequency at which payments are taken.

All you have to do is notify your clients in advance and then take the adjusted payment without needing further authorisation.


“Once clients are signed up to GoCardless for Xero, the payment is made automatically. With Ezidebit we could only do fixed amounts each time or we’d have to go into the tool and manually change the figure, which was incredibly time consuming.” Trayde Mackenzie, Diligence Bookkeeping


4. It’s safe for you and your customers

Within BECS Direct Debit, there are customer protections in place allowing customers to cancel a Direct Debit request, and to refund customers for payments taken incorrectly.

Plus, once the client’s Direct Debit authority is set up, they will be notified automatically of future payments and automatically billed on the due date. There’s no need to for them to re-enter bank details or make payments over the phone, making it a much more hassle free experience.

5. It can integrate with your billing platform

You can integrate Direct Debit payments in to the platforms you already use to manage your business, for example accounting software like Xero, MYOB and Sage. This means no more manual reconciliation of payments – massively reducing the amount of time you spend on admin.


“GoCardless integrates perfectly with Xero. I never need to spend time on reconciliation, as the payments, including the fees are processed and reconciled automatically in Xero. This was a huge plus." Tamara-Lee Beveridge, Owner, BizCore 360


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5 reasons to start taking payments by Direct Debit

Many businesses choose to automate payment collection through Direct Debit but what exactly is the benefit? In this guide, we look at 5 ways Direct Debit can benefit your business.

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