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Five reasons why you should use Integrated Direct Debit

by | Aug 18, 2022 | 0 comments

We often talk about the benefits of automating your payments with Direct Debit – and how you can work even more efficiently by using Direct Debit in an integrated way. But what does Integrated Direct Debit mean? And what problems does it solve that the traditional direct debit system can’t?

Let’s look at the benefits of a fully integrated Direct Debit solution and how ezyCollect is changing the way Direct Debits work for businesses.

What is an Integrated Direct Debit?

Integrated Direct Debit is a payment solution that is an enhancement from the standard direct debits we all know.

Integrated Direct Debit works by collecting payments directly from customers’ accounts that have granted you Direct Debit Authority. When direct debit transactions integrate into your AR automation platform, the whole direct debit process is streamlined from collection to reconciliation, minimising friction. You also gain more control over direct debit payments, allowing you to extend that flexibility to your customers easily.

infographic showing five reasons why AR teams should use integrated direct debit

Five benefits of Integrated Direct Debit

1. On-time payments – even as early as the sales order

Integrated Direct Debit automates the payment collection, so you can collect payments proactively without chasing your customers. You simply select the due/overdue invoices, and with a click of a button, collect the amount owed by your customer. We’ve also expanded Direct Debit’s capabilities further so you can schedule payments and get paid early in the sales cycle.

Here’s how we do this in ezyCollect:

  1.  Direct Debit on sales orders

You can bring sales orders data from your ERP* into the platform and take payments via Direct Debit. Bypassing otherwise manual steps allows you to fulfil that order earlier and, at the same time, get your payment right away. Introducing Direct Debit early in your sales cycle creates a “win-win” situation for you and your customers.
*(for MYOB Advanced, MYOB Exo and NetSuite users only)

  1. Schedule payments

You can plan to schedule collections for all outstanding invoices in a single go. Payments will be automatically debited from your customer’s account on a set future date agreed by both parties – giving you and your customers more control over the direct debit transaction..

  1. Auto Collect

Another option is to let the system automatically schedule the Direct Debit transaction based on the invoice due date, further streamlining your collection process.

Three ways to speed up your accounts receivable collection process

2. Auto Reconciliation

For many businesses, the issue with the traditional Direct Debit service is that it doesn’t integrate with their accounting systems. Without integration, AR teams still have to reconcile payments manually.  

With an Integrated Direct Debit, payments are automatically written back to your accounting system once they are cleared, and are allocated against the corresponding invoice – saving you precious time each day on reconciling payments.

3. Save time and free up business resources

Because Direct Debits automatically collects payment from your customers, you save time chasing payments. Collecting payments early in the sales cycle and automatically reconciling payments also virtually removes manual steps in your AR process.  

Once you apply Direct Debit in your AR collection process, a whole mechanism works behind the scenes to send out payment notifications, write back the payment to your accounting software and associate it with an invoice. It frees up time for your AR team to do more productive work to contribute to your business’ growth.

4. Flexible payment experience for you and your customers

Direct Debits allow you to take payments automatically from customers. But the flip side is that customers feel like they’ve lost control over their bank accounts.

Direct Debits in ezyCollect work differently – while it gets you paid faster by collecting payments directly from your customers, it also allows flexibility.

  1. Adjust Direct Debit date –  If a customer needs more time to fulfil the payment or an invoice is under dispute, you can adjust the direct debit date easily on the platform without calling the bank and without your customers having to incur bank fees for these adjustments.
  2. One-time payments – You can accommodate “on-demand” direct debit transactions on instances when your customers may use a different card/bank account for a one-off payment or call you to make a partial payment.
  3. Daily reports – For Auto-Collect debit transactions, you will receive email notifications on the day when there are invoices due for collection. The notifications give you another level of visibility to track due invoices so you can cancel the transaction or schedule the payment for a future date/time if necessary.

The CFOs Guide to Digital B2B Payments

5. Create a great customer experience

By adding Direct Debit to your payment options, you offer customers another way to pay you conveniently whilst providing flexibility to adjust to their needs. You also help them improve their payment behaviour – which can benefit their business in the long term.

The automatic notifications your customer receives before and after the direct debit payment – regardless of the successful transaction, also provide complete transparency over the direct debit transaction.

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Healthier cash flow with Direct Debit payments

Direct Debit payments provide many benefits for your business, ultimately giving you more capacity to manage your cash flow.

A healthy cash flow means you do not have to find other finance solutions for your business to carry the overdue accounts. It also allows you to strategise business expansion plans with more confidence.

If you have questions on how ezyCollect can help you eliminate late payments with Direct Debit  talk to us today and one of our payment experts will walk you through options for your business.

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