Fighting to maintain a positive cash flow is essential for businesses of any size, but for small to medium sized companies that don’t have the financial safety net that multinational corporations do it can be increasingly difficult to achieve financial security. The reality is, many UK based small business owners are reliant on speedy payments made by customers and clients, if the cash comes late or the cheques don’t clear then there’s no money in the pot for salaries, mortgages and other expenses, which can cause the business to go under through no fault of their own. Many business owners worry about the impact of chasing individuals for money; damaging relationships by taking legal action against debtors can have a negative impact on a business’s reputation that many don’t feel is worth the risk, but handling late payments can be greatly diminished by evaluating the methods with which you receive money.
Many payment methods that businesses rely on are fallible, by switching to a direct debit service a business can ensure they are paid at a certain agreed time without risks of money getting lost in the post or anyone forgetting to sign on the dotted line. So how exactly can direct debits benefit your business?
Greater Peace Of Mind For All Parties
Over 50% of UK bill payers prefer to pay their bills through direct debits for one reason, simplicity. Many people find themselves unintentionally settling their debts late; they forget to send the check, the invoice gets lost in the post or the incorrect amount is paid into the system. By setting up a direct debit your customers and clients get peace of mind, they don’t have to remind themselves to send you payments when they’re due and you don’t have to waste resources chasing anyone for money.
A Fluid System
It’s true that standing orders can protect you from late payments as they too transfer a set amount of money between bank accounts on a given date, but they are tricky to set up and are not easily changed. Setting up a standing order requires time at the bank and a lot of signatures, and if the amount to be paid or the date of payment needs to be changed you have to go through the same hassle all over again. Direct debits are simple to set up and can be easily changed if there is fluctuation in amounts and dates, making them the more convenient payment solution for both parties.
When companies use standing orders as their predominant payment method they can find it takes weeks before they are notified of late payments. The time wasted is costly and the effort to chase up the funds places a burden on a business, but with a direct debit service this burden can be avoided as payments can be monitored at all times from all locations, thanks to cloud technology.
Cost Effective And Secure
The main concern with payments is always security. Neither side of the transaction wants to risk their payments becoming lost or having their information stolen. Direct debits have the benefit of being a completely paperless service, so there’s no risk of information being lost in transit.
With a direct debit you receive instant cash flow as there’s no time wasted waiting for cheques to clear. As soon as the payment is received it is yours to spend, so you can stay one step ahead in the race towards financial security.
Find The Service That Works For You
Companies like London & Zurich offer you the most efficient methods with which to collect money. Their services are fast and cost effective and are tailored to the specific needs of small business so you know they have your best interests at heart. If you want to do the best thing for your businesses finances and cash flow today then it’s time join the growing ranks of companies using direct debit services.
This post was written by Emma Smith on behalf of London & Zurich, a second to none direct debit service with over 15 years of experience helping businesses maintain a positive cash flow and complies with my PR guidelines and disclosure policy.