Last editedFeb 20222 min read
Standing orders make it easy to arrange regular automated payments taken directly from a bank account. The account holder retains full control of the payment date and amount, but what about its timing? Whether you’re waiting to receive payment from a customer or are sending payments to a supplier, here’s what to expect when it comes to standing order payment times.
What is a standing order?
A standing order is a prearranged payment taken directly from a bank account. The account holder sets up a standing order for a specific amount of money to be taken on a specific date. It’s best used for regular weekly or monthly payments, such rent or mortgage bills. It can also be used to make debt repayments as part of an instalment plan. Standing orders are often used to pay for subscription services, regular charity donations, or even simply to move money from your current account into a savings account.
How do standing orders work?
While a Direct Debit might change in value from month to month, standing orders remain constant. For example, your electricity bill might change each month, while a gym membership fee would remain the same. Standing orders also put the account holder in full control of payments. You determine how frequently to make payments, which day the payments will leave your account, and how much you wish to pay.
To get started with setting up a standing order, you’ll need to know the recipient’s full name, sort code, and account number. If you’re paying a business, you’ll also need a payment reference number to keep track of your payments. Standing orders can be arranged using online banking or a mobile banking app, without any need to visit a bank branch in person.
What’s the average standing order clearing time?
When you set up a standing order, you specify the date it should be taken from your account. In most cases, that means that the standing order will be processed that day. However, if the payment is arranged for a weekend or bank holiday, the money might not leave your account until the following working day – although this policy varies by banking provider. A standing order clearing time can take between three to five working days before the funds are available in the recipient account.
What time does a standing order come out of an account?
You can give specific instructions regarding a standing order date, but you can’t control the standing order time. This can fluctuate, with the standing order time of day dependent on the sender’s bank. In most cases, standing orders are processed between midnight and 3am on the date the payment’s arranged. While the early hours of the morning are standard standing order payment times thanks to the Faster Payments Scheme, the window of possible payment extends up to 3pm in some cases.
How to plan for standing order payment times
While standing orders put the account holder in control of payments, the timings can be slightly unpredictable. This is something to keep in mind if your business accepts payment by standing order. Be sure to factor not only the standing order time of day, but also the typical clearing times required for processing. When paying your own business bills using this method, it’s a good idea to set up the payment keeping these clearing times in mind. You might want to arrange the payment for three to five business days ahead of a deadline, ensuring you don’t get charged with any late payment penalties or fees.
Another factor to consider is the difference between standing orders and Direct Debit payments. Standing orders are useful when it comes to paying a fixed amount at regular intervals, but if there’s any variation a Direct Debit is the better option. Credit card repayments, utility bills, or usage-based service contracts should all be paid with Direct Debit.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.