Many businesses today sell products and services on installments. These can be electronics, home appliances, and other items. Some even sell services which can be paid for over an agreed period of time. However, while a company does this to increase the number of sales, the collection of the monthly payments can be a real hassle.
Payment collection options
Many companies will expect their customers to send in the payments on time by either, cheque, money order or bank transfer. However, there are many occasions where a client does not pay and also sometimes forgets the installment altogether. When this happens, the seller or service provider has to resort to follow-up calls and emails to their customers. This can be a tedious task and will require additional staff and a lot of time. It is also not the most effective way to collect payments. Cheques can get lost in the mail and even bounce when cleared. However, there is an option, and that is direct debits.
What is a direct debit?
You may be paying off a contract on your phone or even a large company for a product or service offered on a monthly basis. The money is automatically taken from your account and credited to the sellers account at the bank for a prescribed period. In fact, direct debits happen by the millions each day.
Who can avail of direct debit
Most banks will only offer this service to large companies and the smaller businesses who want to increase sales by offering installments will find it hard to make collections and will not get the direct debit service from a bank easily. This is why it is best to contact a company that offers direct debit service. When this is done, the company will collect the payments from your customers and transfer them to your account with ease.
The benefits
Direct debits are a great way to expand your companies horizons. You will not have to worry about cash flows and waiting for payments in the mail. The direct debit service providers are reputed and reliable companies that will help you as a small business get the direct debit service set up through them. Once payment is received, they will send the money to your account instantly or even before the day the money clears. These services will often be glad to give you loans and cash advances in case you are in urgent need of cash.
