Using Direct Debits to get to the money faster!

Cashflow & Forecasts, Software,

Using Direct Debits to collect payments from your customers and clients is becoming more and more popular, and it’s easy to see why!

  • You’re in control, as the customer needs take no action to instigate the payment. You need to tell them what you’re taking and when of course, but once the Debit is set up, their part is done.
  • Payment is collected by an automated process that starts as soon as you raise the invoice, so you don’t need to remember to trigger the collection.
  • Linking the collection process to your cloud bookkeeping package along with bank feeds means that the receipts are allocated as they come in, saving you even more time.
  • If your chosen supplier has online set-up, where your clients follow a secure link to set up the mandate, you have no involvement in the supply of bank details, so there is no security risk for you to manage.

What types of business does Direct Debit work well for?

  • Instalment options – from monthly to deposits, any partial payment amounts can be streamlined.
  • Regular invoices – if you have clients on a monthly retainer, Direct Debits are ideal, even if the amounts change from month to month.
  • Subscriptions – for software, meal boxes or gym membership.
  • Collecting rent from tenants or hirers.

How does it work?

  • Your customer fills in their details on a Direct Debit form (or mandate).
  • When a payment is due, you warn the customer of the amount and the due date.
  • The payment is made automatically once the due date arrives.

How long does a Direct Debit take to reach your bank?

The first payment can take up to six days to reach your bank account, but future payments would take around four days. It’s not quite as fast as a bank transfer, but this can be balanced against the benefits.

What is the Direct Debit Indemnity?

Your customers have the right to cancel a Direct Debit transaction and receive a refund, which is why the process is not recommended for amounts over £5,000.

How much does it cost?

Depending on the supplier you choose, you can usually collect a payment for between 20 pence and £2 per transaction.


We’ve used Direct Debits for our clients for a number of years, initially in our previous business and now for Baranov Associates. When we introduced the process we weren’t sure how clients would respond, and were wary of the feedback we’d receive.

We needn’t have worried!

It was well received externally as it made life easier for our clients who no longer needed to raise manual payments, while internally we saw a significant reduction in the administrative burden of chasing and managing payments, and an improvement in our cash flow too.

We’ve been really happy with GoCardless as a supplier, which integrates seamlessly with our Xero system.

Why not look into the possibility of using Direct Debits in your business?

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