A Simple Guide to Setting Up Direct Debit for Your New Business in Australia

Businesses that accept payments on a subscription basis have a constant flow of income each month, and a Direct Debit system can help you with that.

 

Direct Debit systems can be beneficial for both parties. For customers, they no longer need to stress about setting and forgetting payments.

 

While for companies, a direct debit service assures a steady cash flow from customers who pay on set dates.

 

There are many options to choose from but before you go to look for direct debit services in Australia you need to know what to look out for. Here’s where you should start:

What is a Direct Debit Platform?

Direct Debit is the fastest and easiest way of collecting payments straight from the bank accounts of your consumers. A Direct Debit Platform is a third-party software that allows you to automatically withdraw payments from the customers’ accounts with their permission.

 

Direct debit is a reliable and ideal option for various businesses that need a system of collecting recurring payments like:

 

●        Subscriptions

●        Insurance premiums

●        membership payments

●        collecting rent

●        Mortgage

●        Electricity and service bills

●        invoices, etc.

What Advantages Can It Bring to Your Business?

Depending on the type of business you own, direct debit can provide various benefits:

●       Payment Flexibility

Firstly, a Direct Debit system can help your business by wasting less time on tracking and waiting for payments. It can save you precious time through automated payment processing. While taking a Credit Card payment takes just as little time, with direct debit there is absolutely no setback on the customer’s side.

●       Improved Cash Flow

Cash Flow is the income and costs that flow in and out of your business daily. You can have much better control of your cash flow using direct debit. Direct debit, allows you to organize every transaction that comes through.

●       Higher Sales

It can be more appealing for customers to have to pay in monthly installments for goods and services instead of one huge annual payment. This convenience for customers can make a huge difference in sales. Another part of its convenience is that customers don’t need to approve or remember to make these payments since its all automated,

●       Organized Future Planning

One of the most important things is that direct debit displays the forecast for your income much more thoroughly. Since you know how much money you will receive each month, it allows the system to estimate the number of sales in the future.

How Do You Set Up Direct Debit?

It is very easy to set up a direct debit system for your business. It can be done in a few simple steps:

1.     Find Your Payment Processing Platform

To begin, you will need to pick a direct debit software that works the best for your business. You’ll need to do some research before you choose one. Picking a local platform can make it much easier for you especially when dealing with your bank.

 

You can even make the system yourself but it usually takes a long time and if you aren’t the best with computers, then it won’t work either.

2.     Obtain the Legal Paperwork

In Australia, the Australian Payments Clearing Association (APCA) requires companies to have a Direct Debit Request (DDR) form and a Direct Debit Request Service Agreement. These documents are required to:

 

●        Obtain consent from the customers to use the system

●        Inform the customers with information about the DDR and how it functions.

●        Inform the customer’s bank know that you are authorized to collect funds directly.

 

3.     Inform Customers of Direct Debit

The third and final step is to let your customers know about the direct debit option. You can implement it during the payment on your website or in-office business. It can even be accomplished by sending emails to your customers and invite them to start using it.