Direct Debit Vs Standing Order
If companies want to take regular payments from customers, two of the easiest methods are Direct Debits and Standing Orders. They are both automatic payment methods but operate very differently.
Direct Debits give a company permission to take money from a customer’s bank account on an agreed date.
With Standing Orders, the customer gives the bank an instruction to pay a fixed amount on a regular basis.
The advantages to a business of choosing Direct Debit over Standing Orders are numerous. Direct Debits give companies automatic notification if a payment is missed. With Standing Orders it can take more than a month to find out.
Direct Debits also offer much more flexibility to the business. The risk of late payment is lower and the administration required to make the system work is less than with Standing Orders.
And unlike Standing Orders, with Direct Debits the amount and collection date can be varied. This is particularly useful if you have customers who don't pay the same amount each month.