Suppose you are thinking to set up direct debit for your small business but feel intimidated because it seems complex, fret not! The process is, in fact, seamless and easy to do. On top of that, you stand to reap benefits by giving your clients this option. Using the right approach to collect payments will have a significant impact on your small company. It is so powerful; it can even promote growth. Take a look at the logical reasons why direct debit has a positive influence on your business:
Amplifies the Flow of Cash
The most significant benefit when setting up direct debit is improving cash flow for your small business. When you have consistent cash flow, you can mitigate potential revenue problems. Cash flow matters for all companies, but it is even more of a concern for smaller companies. Why? You have a limited budget which means you have to be more careful about planning and allocating resources. Let’s suppose you’re in a situation where your business struggles to stay afloat or is just beginning to grow. In that case, unreliable cash flow can result in being unable to meet your financial obligations. Thus, it could harm your finances and affect the reputation you are working so hard to establish.
When you set up direct debit, you can automate your payment collection to decrease late payments and expect a more predictable cash flow. With direct debit, this means charges are made at an acceptable date, agreed upon by your company and the client. Hence, you reduce the chance of clients forgetting or delaying their payment. Since you have money coming on specified dates in the calendar, there won’t be any harm to your business with cash flow issues and shortfalls.
Offers Best Transparency and Visibility
With direct debit payments, you have better visibility of your company’s cash status every month. Through this level of transparency, you can cease fretting over when money will come in. You know exactly when the payments will be made! As such, you can stress less and enjoy more freedom in doing other things. Instead of worrying about payments, you can focus your attention on growing your business.
In the same token, your clients will appreciate you for providing this convenient payment method. With this service, you give them a chance to specifically see the exact amount being drawn out of their bank accounts and when the transactions are made. When it comes to any business, the customer is king! Make it easy and convenient for them, and you will earn their trust and loyalty. Moreover, above 90% of clients have access to a bank account and direct debit.
Inspires Customer Loyalty and Boosts Retention Rates
If you want your small business to survive and thrive for the long-haul, customer loyalty is paramount. Hence, you need to maintain your relationships and establish loyal clients. This group of people will help lay the foundation for your success. Remember, direct debit is a payment method you can count on because people trust it. Most direct debit management software use state-of-the-art security features that offer an additional security layer for your company and clients. With these features, your clients will feel secure knowing that their private and financial information is protected from hackers.
Above all, direct debit as a payment option offers convenience! When you make your clients’ lives easy, you inspire loyalty. For this reason, studies show that you can expect better retention rates.
As you can see, implementing a direct debit system is a total win for your company. With this as a part of your payment options, you can focus on your business’s growth and development. You no longer have to chase those clients with outstanding debt or worry about lost clients who keep forgetting their due dates.
