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Direct Debit - the myths and the truth

It is a fact that companies which use Direct Debits to collect the payments they are owed will have greater control over their cash flow than companies that don’t. It doesn’t matter how many (dozens a month) or how few (once a year) payments you collect, with Direct Debit your cash flow is entirely manageable and predictable giving you peace of mind while allowing you to concentrate on growing your business.

Some facts about Direct Debit:

• Almost 4.4 billion Direct Debit transactions were processed in 2018 - that’s more than eight Direct Debits for every UK adult
• Over 1.6 billion Direct Debit payments were processed for utility and household bills
• Nine out of 10 British adults have at least one Direct Debit commitment, with 73% of household bills paid this way.
• 62% of people in GB prefer to pay regular bills by Direct Debit, with 41% advocating it for all regular bills.

By any measure, these are impressive statistics, and yet despite the popularity of Direct Debit it is still surrounded by myth and misconception. Here, we’ve taken five popular myths about Direct Debit and debunked every one…

The myth #1
Direct Debit is only suitable for large companies.

The truth
It's not hard to see why this myth exists.

For many of us, our first use of Direct Debit was when we set up an automated payment for utility or telephone bills to a large multi-national organisation, which inevitably leads us to think that Direct Debit is the preserve of large companies.

The truth is somewhat different, however. For any business the significance of managing cash flow is of paramount importance and companies which collect regular payments by Direct Debit can manage their cash flow much more easily that companies that collect payments by other means.

It doesn’t matter if you collect dozens of payments each month or just one payment a year, Direct Debit means that business owners know exactly what money is coming in and when – no matter their size!

The myth #2
Direct Debit is of no benefit to my business.

The truth
Poor cash flow is one of the main reasons SMEs go bust. The biggest and healthiest looking order book in the world is no use if no money is coming in.

Late and missed payments continue to be major issues for businesses. A recent survey showed that over half (54%) of small businesses are affected by late payments.

Getting the money in the traditional way, however, can be easier said than done. Cheques are forever 'in the post', the accounts clerk is perpetually 'on holiday', and the person who needs to sign off the invoice is always 'out of the office.'

With Direct Debit, those problems disappear instantly. With Direct Debit businesses know exactly when the money is coming in and how much they’re going to receive. It’s incredibly easy to set-up and cost effective to operate. And if for any reason a customer does miss a payment, your Direct Debit processing company will flag it up straight away, so it can be sorted out quickly.

Once businesses sign up to Direct Debit as a payment collection method, they tend to see an improvement in customer retention rates. Most people simply prefer to keep paying automatically rather than looking for a new supplier.

The myth #3
Direct Debit is expensive to set up and manage.

The truth
There is a perception that using any third party to collect money must be costly. Look at the figures, however, and it compares favourably with the cost of processing cheques or credit card fees.

Additionally, Direct Debit enables businesses to save many hours of laborious credit control. With Direct Debit there’s no need for your accounts team to chase invoices so companies can put their employees' time to much better use, or possibly even reduce staff costs.

Eazipay sets the gold standard in Direct Debit management. Our levels of customer service are second to none, our set-up process is very simple and with Direct Debit collections starting at just 42p per transaction; it’s incredibly cost-effective to operate.

The myth #4
A Direct Debit system is difficult to set up.

The truth
Setting up a Direct Debit payment system takes about a month in total – dependent on bank approvals and credit checks etc. The process itself is incredibly simple and adding new clients can be done in minutes.

All you need to do is provide the necessary information about your new payer. The bank is then given five working days’ notice that there is to be a new Direct Debit; on day five the payer’s account is then debited and the funds credited directly to a unique client holding account, which is personalised in your company name.

Cleared funds are then transferred to your account on day seven.

It’s that easy and once your clients are set up the payments go through automatically at the frequency you specify – monthly, or as infrequently as once a year.

Eazipay offers total support every step of the process and once the system is up and running our expert staff are always just a phone call away should help be needed.

The myth #5
Setting up a Direct Debit with a customer is time consuming.

The truth
It always used to be the case that new Direct Debit customers had to sign a paper instruction. This involved either a face-to-face meeting or communicating by post. In any event, it could become a time consuming and sometimes lengthy process.

Times, however, have moved on. Considerably.

Today, paperless Direct Debits are much more common. Customers can sign up over the phone, via email or online and all three ways are much quicker and less labour intensive.

These new methods also improve accuracy and, because they are so easy, increase sign-up rates.

Eazipay’s Paperless Direct Debit sign up scheme manages all of this for our customers. It saves time and reduces the risk of entering invalid information for new payers.

Eazipay helps business large and small access the power of Direct Debit. Thanks to over 20 years’ experience, we are perfectly placed to help you improve your business’s cash flow management processes and save you time and money by establishing regular payment collection via Direct Debit.

★★★★★

James Simpson
SkinViva Ltd
Wonderful company. They offer a very efficient service with a quick turnaround time between Direct Debits being processed and the funds being transferred to your business. They provide good reporting that has helped our business gain a better understanding of our own clients. We've been with Eazipay for several years and all throughout that time we have received great customer service that has a very personal feel to it. It can often feel like you're their only customer!

★★★★★

Michelle
John Cashin Tuition
We have been using Eazipay for our private tuition business for approximately seven years and we couldn't be more impressed. Deciding to use Eazipay has been one of the best decisions we have made. It is so much easier for me now that I do not have to chase customers for payment, it's all done for us - like clockwork. The staff are so helpful, courteous, friendly and super efficient. A very professional service indeed. For me Eazipay are worth their weight in gold!

★★★★★

Mark Ward
Midland Tech
Midland Tech have been using Eazipay for nearly four years and the service has been excellent. It's easy to use, payments are received promptly, and customer service is very good. Emails are answered quickly, nothing is too much trouble, and everyone you deal with is very knowledgeable and friendly I would recommend Eazipay to anyone.

★★★★★

Oliver Thompson
CCCit
We have been using Eazipay to take direct debit payments from our clients since 2008. As a long standing customer our business could just not run without the assurance that we are going to get paid on time. Eazipay has allowed us to grow our business without the hassles involved in collected numerous monthly payments. We really appreciate all the hard work and expertise that the team at Eazipay bring to our business. Thank you from everyone at CCCit

★★★★★

Andrew Straton
Yorkshire Dales Sailing Club
Eazipay have been collecting Direct Debits on behalf of the Yorkshire Dales Sailing Club since 2009 and we have never looked back! It has made our administration, run entirely by volunteers, so much easier and saved us large amounts of cash by not having to post reminders to members every year. Thank you EAZIPAY, you do a great job and I would (and have) recommend you highly to anyone thinking of using a Direct Debit system in the future.

★★★★★

Emma Statham
We have been using the services that Eazipay Ltd offer for some years now and cannot recommend them highly enough. in a nutshell, they offer an incredibly professional, personal , and faultless service allowing us to collect direct debit payments from some of our customers, hassle free. Natalie Terris is our account manager, and she is helpful, friendly and knowledgable. All our queries are dealt with simply and swiftly. All the Eazipay processes we use are simple to use. We wouldn't go anywhere else- Thanks Eazipay! x

★★★★★

121 IT Services Ltd
We started working with Eazipay in September 2013 and since that time they have made both our clients and 121 IT's life so much simpler. The staff are great, friendly and very good at what they do. Would totally recommend them, thank you.

★★★★★

Mark Wyatt
Telecom Network Services
Telecom Network Services has been a customer of Eazipay for 14 years, since I started the business. The staff at Eazipay are outstanding, always efficient and process payments accurately and on time everytime! I recommend Eazipay Ltd, they are a great company to do business with.

★★★★★

Steven Bourne
We have been a client of Eazipay for over two years now and the service is excellent. There is always someone available on the end of the telephone to deal with any queries and it is a very professional set up. The way in which the system operates is very straightforward and we save hours of time and hassle compared with using the old method of standing orders. I would thoroughly recommend Eazipay to any business which wants to make collecting money easy!

★★★★★

Emma Martineau
Phones 4 Business started collecting payments by Direct Debit in 2007. We chose Eazipay and have never looked back. I daren't calculate how much time I have saved in using Eazipay and staying with them is a no brainer! Why change when I have such a good supplier? It is service that counts; Natalie Terriss and the whole team are always very friendly, efficient and reliable. I have no hesitation in recommending them.

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