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 really mean? And what problems does it solve that the traditional direct debit system can’t?
In our recently concluded webinar, Amanda Lee, founder of Amanda Lee & Co. and Receivables Management Advisor, Jimmy Cooper, Co-Founder and UX Researcher at ezyCollect, and Tony Gu, Customer Sucess Lead at ezyCollect, discussed the benefits of a fully integrated Direct Debit solution and how ezyCollect is changing the way Direct Debits work for businesses.
Here are the key takeaways from the session.
What is 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 are integrated 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, making extending that flexibility to your customers easier.
5 Reasons Why Your Business’ Cash Flow Will Love Integrated Direct Debit
1. Automatically writes back to your accounting system
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. When your customer’s account is debited for payment, it will automatically be marked as ‘Allocated’ on your ERP, saving you precious time each day on allocating payments.
2. Simplified customer process and payment experience
We all know how Direct Debit automates the payment process by collecting payments from your customer’s account through a direct debit authority. But the flipside of that is that customers feel like they’ve lost control over their bank accounts.
Integrated Direct Debit work differently in that while it gets you paid faster by collecting payments directly from your customers, it also allows for flexibility. For instance, if a customer requested to cancel the direct debit transaction, you can easily do so on the platform.
An Integrated Direct Debit payment option also helps you stay competitive. It’s another digital payment offering you can make to customers that competitors don’t have. Integrated Direct Debit is another way of offering the customer another great chance to pay you in a different way that your competitors won’t have.
3. Technology frees up business resources
Because integrated Direct Debits automatically collects payment from your customers, time spent chasing payments is reduced. It frees up time for your AR team to do more productive work to contribute to your business’ growth.
It’s also important to note that because you now have more control over when you get paid, your cash flow is more predictable, allowing you to strategize business expansion plans with more confidence.
4. Focus on customer relationships and experience
Focusing on customer relationships and their entire experience with your business is of optimum importance.
By optimizing the customer experience and giving them opportunities like ezyCollect’s Integrated Direct Debit where you can collect now, or the customer has an option to schedule the payment, it provides the customer with a user-based experience. It starts making their relationship feel more connected with your business.
Another issue businesses had with direct debit was the ethical responsibility that comes with a customer’s permission to access their bank account or credit cards to take payment. A client’s financial situation can change at any time, but because standard direct debits aren’t managed easily by businesses themselves, adjustments take time and money, affecting customer relationships.
The beauty of Integrated Direct Debit is that it factors in the human side of accounts receivables. It gives businesses the ability to make any adjustments through the platform in a split second. Businesses can control how they receive payments and allow for flexibility that enhances the customer experience.
5. Predictability over your business’ cash flow
With Integrated Direct Debit, you are getting your money in the bank on a specific date and time, which gives you a lot more capacity to manage the cash flow in your business.
A predictable cash flow also means that you do not have to find other finance solutions for your business to carry the overdue accounts in your business. Businesses need to ensure they are constantly pushing the responsibility back onto the customer to pay the invoice on time as this directly affects the cash flow. By adding Integrated Direct Debit to your payment options, you offer them a different way to pay you that’s convenient for both parties and flexible enough to adjust to their needs.
Watch the webinar
Get the full insights into improving your AR collections with Integrated Direct Debit. Watch the entire webinar on-demand.