The barriers around traditional direct debit

Tony Gu:

First up. So Jimmy, I’m gonna put you on the spotlight. Direct Debit is not a new thing. You know, everyone knows it. But too many people don’t like it. Why is that?

Jimmy Cooper:

There are different categories as to why people are hesitant to roll it out because of the traditional baggage that goes along with, with that concept of a direct debit, like the fact that a customer might feel like they’ve lost control of their account or there’s that perceived lack of flexibility. I also think the direct debit as it is today, is probably not a complete solution. It’s missing the part where it’s integrated within your accounting system. So that’s the difference between what we’re building here in ezyCollect.

What makes integrated direct debit different?

Jimmy Cooper:

So direct debits as it is today is probably not, not a complete solution. It’s, it’s a tool that’s available, but it’s not integrated into your accounting system. So, it doesn’t for example allocate the payment back into your system when somebody makes a payment. So we’ve built those features into ezyCollect. So we want our clients to be able to collect when the time is right. So they had the authority in place to be able to collect when the time’s right. And we have got on our roadmap the way to automate that actual process is to have the payment collected at the end of the agreed terms.

Amanda Lee:

If I could just cut in here, Tony just adding to Jimmy, the thing that makes integrated direct debit very interesting. And why I’m excited about ezyCollect bringing this to the platform now is we’ll cover soon how direct debits in some ways have had a bit of a bad reputation for businesses when it comes to getting payments off customers. But what I want the audience to understand today is that integrated direct debits with ezyCollect is different we’re going to show them how most of it is automated and how it gives the customer so much more control over what’s happening.

So the integrated direct debits are exciting, and it also means that it’s so much smoother for the business to collect payment from customers. Now personally, when Jimmy came to me and said, we are doing integrated direct debits, I went, oh, direct debits. Yeah. They’re not popular. But when he showed me what was going to happen, I was very excited. So this is a streamlining here within the business. That’s adding another way for businesses to free up time, et cetera, and get on-time payments from customers.

Collect Now, Schedule Payments and Auto Collect: The stepping stones for automated IDD

Tony Gu:

So with the integrated direct debit, you know, that sounds, you know, a really good solution for, for most of our businesses and, but it doesn’t just happen overnight. Right. So Jimmy, can you just talk us through and share with the audience here, some of the steps that we’ve taken at easy collect – the stepping stones, if you will, towards an automated, integrated, direct debit.

Jimmy Cooper:

1. So the first thing is that you need to get the authority from your client to debit their account.
2. And then the next thing is you want to be able to make that transaction, like kick off that transaction, right.
3. And then further development of that is, well, I don’t wanna manually trigger the transaction. I wanna schedule that transaction to happen on Wednesday next week. Right. So I’ve set that I can set that up.
4. And then a further evolution would be when an invoice is created and issued, I want the scheduled payment to automatically kick off on the due day of the invoice.

So it’s important to kind of take that step by step, right first, get the authority. Then you’ve got the ability to manually kick off the transaction, and you kind of want to step carefully into the automated side of things, cos each business is different. The types of invoices issued are very different. There may be different challenges in each and every business, right? It’s not a blanket solution, not direct debits, everything, that’s it. So it’s more of a considered approach to getting to automation. And that taking that considered approach to getting to automation means you’re gonna have fewer issues when you click the automation button on.

Integrated Direct Debit Demo

1. Get authority from customers

Jimmy Cooper:

So the first step we said was that I need to get authority from my customers. Right? So here, I’ve got a list of all my customers. And I’ve got the icon here that says, I request authority now, which means, I don’t have the authority to debit this person’s account yet. And you’ve got this green icon that says, were the authorities in place for this particular client. Right? So let’s take the first case of where there’s no authority in place, so, okay. What do I do with this, with this customer? Well, I need to get them to sign a direct debit form.

So I click on the request authority button and hops up my template editor.

And these templates can obviously be to you know, with your own branding, et cetera. Your client will then get an email with the set up direct debit button. They click on it. And it’s an electronic direct debit form where they fill in their details and they can choose either, you know, bank account or a credit card once that happens. When your client fills this out, ezyCollect then knows that the authorities are in place and then the collect features are available for that particular client. So you can see there, the direct debit authority for this particular client is being acquired.

2. Collect Now

Jimmy Cooper:

So we’re, we’re within rights to debit their account when the invoice is due. So if we go down here, I’ve got an invoice that’s due on the 26th, so I can go and manually collect it. And now, depending on your business, you might, you might say, well from my particular business, I wanna make a phone call to the client first and say, you know, Hey Bob, is it cool if I debit your account? Your invoice is due. They might say, yes, they might say, no, gives a few more days. You can adjust it. You can adjust when you come to collect it, right? So that’s the collect now feature. So make the transaction happen when due.

3. Schedule payments

Jimmy Cooper:

The second option that we have is you can schedule the payment. So rather than go in on the day, you can go in when you issue the invoice and it’s within ezyCollect. You can go in and say, okay, for this one, I know it’s fine with Bob for me to collect it in the few days. Or you might say, well, he needs a few extra days cuz of some issues that have popped up. So I might get into all the 28th and make the debit happen on that particular date instead.

4. Auto Collect

Jimmy Cooper:

Now you don’t need to send these direct debit requests individually. And I’m sure you, you probably wouldn’t do that in, in reality. You might, you might do it in bulk, right? You might say, okay I’m setting, I want this capability for my business, so I’ll go and let everyone know that there’s a direct debit system within the business that they can utilize.

Tony Gu:

 Jimmy so this is all about, you know, giving control essentially back to both clients and their customers in how they want to use their finances and manage the relationship between the two parties. Right. You’re not just setting up, you know, a blanket direct debit to go off on the first or second of every month. It’s about talking about with that particular customer, what they wanna be direct debited, how they wanna be direct debited and coming to a mutual agreement as that particular transaction. Is that right, Jimmy?

Jimmy Cooper:

Correct. It’s about, it’s about addressing their fears, right? It’s about addressing like why don’t they want to be on a direct debit right. In a lot of it, like I think I mentioned earlier is around that control, ‘I’ve lost control of my account. Are you just gonna take money whenever you want?’ Well, no, we’re not. We’re gonna check with you. We’re gonna be transparent with you. Let you know what’s happening. This is just an easier mechanism, right. To do business with us.

Tony Gu:

Sure. And, and let’s just play, you know, devil’s advocate here, right. Because, you know, historically let’s just say, if you are with like an insurance company, you’ve set your direct debit cancellation is an absolute nightmare. Right? So in those situations, if, say, for example, one of our client’s customers, you know, their customers once actually canceled that type of arrangement, is that easily done through this platform or does it involve bit more, bit more stuff to it?

Jimmy Cooper:

In this current stage of development, it’s easily done by communicating with them, so if they send you an email and say, ‘Hey guys, we wanna cancel the direct debit’, you’re, you’re able to cancel it pretty easily right. Within the system. So, our plans are to actually make that facility available for our client’s customers. So like they can have a portal where they can go in and adjust what they need. Right. They can say, well my invoice is due on the 15th, cuz our terms are 15 days or whatever it, this. But I, in this particular case, need a little bit of extra time. And you know, so they’d be able to adjust the due date. It’s not there now. It’s still in, you know, the planning stages with testing.

These are all great ideas that we have, but it’s once, once we actually implement them that we learn what works, and what doesn’t work. What’s a great idea. What’s a rubbish idea. The end picture might be very different to what I’m describing, but that’s the type of thinking that we’re we’re employing at this stage. 

That’s what we’re, because we want it to be useful for our customers, but we know that it’s not going to take off or it’s not gonna be adopted by their customers unless there’s something in it for them.  So it’s about figuring what that out figuring out what that is and then developing in that. 

AJ Singh:

That’s a great tip, actually, because… Yeah. I know, if I got an email that’s from a system that’s automated, but it had, like you said, hope you’re staying dry during this rainy season, it’s one of those things where, hey, hang on, is this an automatic message or is it coming from someone who actually typed up this message? You take a double-take, right? Yeah.

Five Reasons to reconsider Integrated Direct Debit as a payment option

1. Automatically writes back to your accounting system = saves you hours of time

Tony Gu:

You’ve seen the demo now we’ll get Amanda’s expertise and input on these five reasons. So first of all, payment write back, right? For some of you here today or from most of you, if not all of you, this is not a foreign concept, right. It’s available as part of Simply Paid. So Amanda, how does this exactly save people time and money?

Amanda Lee:

Well, everything that you’re doing in receivables management is time and time is always money, as we know in business. So trying to automate as much as possible is always a time-saving exercise. So, we should always be looking at technology, automating things whenever we can. So integrated direct debit is fantastic because, you know, standalone direct debits that you currently have, you still have to manually manage that process predominantly.

So, you know, integrating this into ezyCollect and being able to issue the direct debit, right from the platform, managing it from the platform and down the track, even the possibility of the user, being able to manage their direct debit with you. That’s just an incredible offering and something I’m going to talk about later with regards to how this is a much easier sell for easy click users to the customers now to actually sign up for direct debit and the difference that will make to cash.

2. Simplified customer process and payment experience

Tony Gu:

Second point. How does having a, an integrated, direct debit as a payment option, simplify the customer process and payment experience?

Amanda Lee:

Well, first of all, obviously it’s easy. The customer only needs to sign the direct debit authority electronically. They’re not having to, you know, fill out forms and send them back to you, which people just hate doing. Customers don’t have to actively remember to make payments to you.

And the one thing I, I love about direct debit is as you all know, I’m always about the humanity around collections. But the good thing about direct debit is people hate direct debits in the past because they felt like they lost control over their bank accounts or their credit cards. And that was predominantly because larger organizations that put people on direct debits, like power companies or phone companies. If someone run up to change the date of their direct debit, it just wouldn’t happen. And then people would get banking fees, et, et cetera, bouncing fees. And there was just like customers really didn’t like it.

But this is changing (with Integrated Direct Debit) and giving all of us peace of mind because the business owner can offer a direct debit product to their customer now, which helps them get paid faster and manage receivables better. But it’s also something that the customer’s going to be happier with. And I think that’s why I’m loving this integrated, direct debit. I think it’s a fabulous new piece of the toolkit to offer your customers for payment.

3. Technology frees up business resources

Tony Gu:

Yep. Fantastic. Thank you very much for that, Amanda, next point, technology, what can businesses accomplish with this technology?

Amanda Lee:

Well, when we talk about time is money technology definitely frees up resources for businesses, right. And that’s a really important money-saving exercise. But it also one of the biggest things for me is it helps you stay competitive. So I always look at receivables as part of your sales strategy. And it is a database of existing customers you have that you can upsell to, or that you should always be nurturing that relationship from a sales perspective.

So, an integrated direct debit opportunity helps you stay competitive and it’s another offering that you can make to customers that competitors don’t have. You know, if you are offering, for example, offering different terms to customers is part of your sales strategy. So if you are offering better terms or a plethora of terms to businesses, you’ve actually got a better opportunity of securing that customer as opposed to your competition. So I see this as another way of offering the customer another great opportunity to pay you in a different way than competitors won’t have. So it helps you stay very competitive in a market that is very tight and competitive at the moment. So that’s something to consider.

4. Focus on customer relationship and experience

Tony Gu:

So we got relationship, customer relationship and experience. I actually love this point, right? This is what customer success is all about, right? Building relationships with your customers, understanding their needs and working together in partnership. Amanda, as someone whose philosophy is communication with connection what, what can you tell us more about this point?

Amanda Lee:

Focusing on customer relationships and their entire experience with your business is of optimum importance and something that businesses should always be focusing on. Because once again, as I say, it’s all part of the sales experience.

So what is your point of difference as a business? People always look at this from a sales perspective. But do we look at it from a receivables perspective as well? Cause we should be. So by optimizing the customer experience and giving them opportunities of like an Integrated Direct Debit where you can collect now or the customer has an option to schedule the payment, et cetera, you know, it starts giving the customer a user-based experience. It starts making their relationship feel more integrated with your business.

So an integrated, direct debit, isn’t just for you as a business, it’s for the customer, it helps also feel integrated with your business. Because the other options we are bringing into this soon through ezyCollect are really going to give the user a lot of control because the previous issues that most of us had with direct debit were the ethical responsibility that comes with a customer new permission to access their bank account or credit cards to take payment.

I believe a strong ethical responsibility comes with that. So if a customer rings you and says, ‘Hey, builder, hasn’t paid me the money this week, or my big customers haven’t paid me. It’s gonna be a couple of days, you know before that money lands, can you please just change the date on that direct debit this month? Give me a couple more days.’

Now in a situation like that, it should be of immediate importance that we alter that for the customer and work with them. The beauty about this Integrated Direct Debit is that is exactly what it gives us the ability to do in a split second through ezyCollect. And it’s so easy for the business to manage that. So it gives a whole new perspective to the direct debit experience. And I’ve probably talked too much about that, but you can tell that I’m a little bit excited about that aspect of this Integrated Direct Debit, because it really does change everything.

5. Predictability over your business’ cash flow

Tony Gu:

Awesome. Fantastic. Thank you very much for that, Amanda. And last but not least, you know, how can integrated direct debit as a payment option, give predictability over a business’s cash flow.

Amanda Lee:

Yeah, this is really important. So, you know, if I give you an example if, if you’ve got a $5 million ledger and you know, you’ve got 50% of your customers that don’t pay by the 15th of the month. And let’s say you’ve got the end of month to, if you’ve got 50% of your ledger that that’s still overdue, you know, two weeks after the due date, you know, that’s a significant amount of cash flow that you don’t have in your bank. And it becomes more and more difficult for you to cash forecast for your business too when you don’t have more around when payments will be made by customers.

And in the climate we’re trading in it, it becomes more and more difficult for these right? Businesses. You know, things change a lot in the marketplace. So getting people signed up to the Integrated Direct Debit means that you are getting your money in the bank on a specific date and time, a specific time period, which gives you a lot more capacity to manage the cash flow in your business.

It also means that you are not having to you know, find other finance solutions for your business like overdrafts or bridging finance, etcetera. You know, to actually carry the overdue accounts in your business, we need to keep making sure we are always pushing the responsibility back onto the customer to pay the account on time. We, offer them as many options as possible to do that. We give them as many different ways of doing that. And the integrated direct debit is one of them, but with humanity, we also need to make sure that we are not being too soft and that we always make sure we are holding customers accountable for paying on time. So this helps you reach that point even better and, and pull customers into making payments even sooner.

In Summary

Tony Gu:

Awesome. Great. That’s very insightful, Amanda. So just to sum this all live, you know, over the last five points and, and you know, this whole webinar, what, what can you give to, to our customers here today? What will be your advice?

Amanda Lee:

 So I have a lot to say about, about direct debits. And coming, coming from a customer-driven perspective is always my number one priority, but we also have to consider the environment that the whole world is in at the moment. And our Australian economy you know, at the moment, businesses are in survival mode, adding, adding different options, like the integrated, direct debit, and offering these additional suites of payments to your customers is just constantly giving you that little bit of competitive edge. It’s giving you you know, great customer service. It’s showing that you’re doing everything you can for your customer to help them pay you sooner. It shows your investment in your customer.

And when you are combining technology and platforms like ezyCollect and the strong customer relationship together with brilliant payment solutions, it means you go from business survival to probably more so thriving because you are, you are working with optimal optimum cash flow.

And you know, in these times, that’s, that’s just being customer centric is important. That just goes without saying, but understanding and addressing customer needs is something that we should always be looking at, always questioning if we are doing enough questioning if what we’re offering is what our customer base wants. The the good, good thing I love about the integrated direct debit is I wanna bring up an example because I do, I do a lot of work in the construction space and obviously it’s a very volatile space at the moment. And a prime example was Probuild that went into administration and liquidation. And, you know, that’s a big company that nobody in Australia ever thought would go broke or closed down. The example of pro build shows to everyone watching this webinar, that there is no such thing as a company that can’t go or a company that doesn’t struggle, or a company that can’t be affected by events that happen in the world.

So regardless of your customer base, never assume that everyone on your books is okay. And the thing we need to focus on is the, the top 20% of your customers is usually the ones that you are doing 80% of your business with. So when you look at your ledger, if you even had one of those businesses go broke, could you still survive? So having customers on integrated direct debit and platforms like easy collect gives you every advantage, even for, from a risk perspective of making sure number one, you’re getting paid as quickly as possible. Number two, you’re managing your risk because you’re getting your money faster. And number three, you’re improving your cash flow as much as you possibly can, and that saves you a lot of money. So that’s what I think in summary about integrated direct debits.

Tony Gu:

Awesome. Thank you so much for for that, Amanda Jimmy, is there anything that else you would like to add to do that.

Jimmy Cooper:

I would actually, I’d like to add that what you have today with Collect Now, with the iIntegrated Direct Debit is you’ve got a tool now that all the businesses that are on the webinar today, you can take that home today, utilize it, start to learn what it’s gonna take to to get your customers on this type of a payment solution in mass. And, and then you can, we can automate that in, in the near future, right? But take this opportunity with the the manual process that’s in place now to, to learn what’s gonna take. Cause each business is gonna be different. Each business is gonna have different hurdles to, to jump different needs that it needs to meet, et cetera. So use it to learn is my summary.

Amanda Lee:

Another thing I’d just like to add there as well that I didn’t mention was businesses may have a little bit of difficulty or are not sure how to transition people onto integrated direct debit. You know, the team is all here to help our, our customers with that too. I’m definitely available to help businesses with that. That’s one of my expertise is helping you do things like that.

Because one of the easiest way to get people to move into integrated direct debits is by offering them an early payment discount. And early payment discounts will encourage them to pay on time and, and take up an option like this. The only thing I do say about early payment discounts is you have to be very strict about it. So if they pay within two days of the due date or they pay on the due date, then that’s when the early payment discount applies. If they pay after that time, they do not receive the early payment discount. So you must keep those incentives very strict so that it keeps people on the direct debit. Don’t let them break those boundaries, but if anybody needs help transitioning customers onto an integrated, direct debit, I’m more than happy to be available to have those discussions.

Q&As

Q:. Is there a notification to the customer for each DD?

Jimmy Cooper:

So when you, so when they set up the direct debit, there is a notification that the direct debit has been set up for the ezyCollect user and the customer. There isn’t any notification in this current version to let them know that a direct debit is scheduled on a specific date or anything that there’s no communication along those lines at this stage. But that doesn’t mean that there won’t be in the future. 

Amanda Lee:

Another thing I’d like to address for the viewers is along with the early payment discounts if people are paying you faster through integrated direct debit, it also means that you may be able to get rid of some financing options. You’ve got to help cash your own business like invoice financing or data funding, et cetera data finance, et cetera, which are great short term solutions. They’re great products in certain circumstances, but they’re not always products that you want long term, they can be expensive. So we are always trying to look for solutions.

And that’s why I love ezyCollect, always looking for solutions to get you paid faster. So the cash flow in your business is so good that you actually do not have to use these financing options or overdrafts or bridging finances, which cost you a lot of money. We’re, we’re actually getting rid of those types of facilities and having you operate a much better business from a financial perspective. So even though these options may seem like small additions to your business, they can actually have a significant impact on your cash flow. And that’s what we’re always about, right? Get the money in the door as quickly as possible and get it in your bank so that you can manage your business.

Q: So there’s another question here, but I think Amanda already covered that one off around the discount side of things.

Amanda Lee:

Yeah. I’d also like to say if you know, I’ve, I’ve previously as I said, I’ve not been a fan of direct debits previously, and I’ve been very wary of putting my clients onto direct debit systems. And it’s something that we’ve been a bit cautious with because of a lack of flexibility in many ways. So I’ve, I’m loving this product and the flexibility that it has, I’m glad that ezyCollect is introducing it with the Collect Now and the Scheduled Payment part first before it goes to complete automation with Auto Collect. Because it’ll give all of us an opportunity to understand the seriousness of direct debits and, taking that control for the customer. So, you know, always have the front of mind that this is, this is an important payment process and we all need to manage it with some sophistication and some, some ethics.

Q: What fees are involved for us and our customers? Do you wanna take that one, Tony?

Tony Gu:

Yes. Are you referring to actually getting the product set up on your ezyCollect as in Collect Now?

Right. So look I’m just gonna say, been here say, look, assuming if you are currently already using ezyCollect and Simply Paid, right. This is something that we can work on with you together. There are no associated fees as such. We will explore with you the options around, you know Collect Now, how that integrates with ezyCollect and we’ll batch test a few clients with you together to see how it actually all works. Right. So if there are any issues that unfold in the process we’ll address those proactively.

So in terms of the overall fees and charges, there are none at this stage. But yeah, look, I think, you know, as the product evolves over time, Jimmy, correct me if I’m wrong if we do implement additional features to it there may be other costs involved.

Jimmy Cooper:

Yeah. Yeah. So at this stage it’s no, no additional cost to utilize it. That’s right.

Amanda Lee:

And we, we need to remember too, that existing direct debits with banks and with large companies that do direct debit, there’s usually small fees, et cetera, involved at one end or another. So customers, aren’t worried about those tiny fees at their end. From the ezyCollect end, obviously at the moment, there’s no fees. So that makes an even greater offering. But never be too worried about the customers with small fees. Customers are getting a lot more used to fees being charged for everything now for most types of payments, even with credit cards now they’re getting used to having to pay fees whereas before they used to be absorbed by businesses. So it’s, it’s a good way to get money in the door quickly without a high cost to anyone.

Jimmy Cooper:

Yeah. I think the conversation around fees yeah, you should look at both by size of it. So it’s, it’s the fee, but also the utility. Right. So you know, it might have it, there might be something with it, very low rates, but it’s, it doesn’t have as much utility as another system, et cetera. So like to look at both parts of it.

Amanda Lee:

Yeah. I agree. Jimmy, a business should look at not just what something costs, but in fact, what it’s actually saved them by having that cost. Yeah. You can’t just look at the cost alone. You have to look at what that cost may be saving you at the other end in time, money or by automating the process. So yeah. It needs to be assessed, as a whole.

Tony Gu:

Cool. I think we’re, we’re on time guys. Look, thank you all for attending this webinar. Now I hope, you know, everything, everyone enjoyed this session and, and took away something.

Thank you again to both of our speakers, Amanda and Jimmy today. If anyone in the audience has any questions or if you’d like to explore any of the product features we’ve showcased today, please feel free to get in touch. I hope everyone has a great day and enjoys the rest of the long weekend yet to come.