Why Invest in Automated Direct Debit Software?

Paying by Direct Debit has become synonymous with trust and convenience. Launched in 1964, it’s been a reliable transaction method of choice for over 50 years, with Direct Debit volumes first breaching the one billion mark in 1987. 

A Direct Debit is a payment that’s automatically collected on a set date for an agreed amount from a bank account. In 1996, the Automated Direct Debit Instruction Service (AUDDIS) was introduced, allowing organisations to digitally send Direct Debit Instructions to a customer's bank. Automation results in the payments being organised, managed and maintained electronically, making the whole process easier, quicker and more accurate to run. 

Alongside the digital revolution, Direct Debits have evolved through automation to reach around 9,000 payments per minute during 2023. But the development of automation for the service completely transformed its capabilities.

In 1996, AUDDIS (Automated Direct Debit Instruction Service) was introduced. This made the sharing of Direct Debit instructions between service providers and customers’ banks more efficient. This is because the movement away from manual processing to automation reduced errors and increased processing speed. 

In this article, we ask why invest in automated Direct Debit software and how this solution can benefit your business. Knowing what Direct Debit managed services are could help transform the way you collect payments and consolidate revenue streams.  

Contents

• What is automated Direct Debit software?
• Why invest in automated Direct Debit software?
• Lead with automated Direct Debit software from Interbacs. 

What is automated Direct Debit software?

Direct Debit software automates each stage of the collection process, from gathering payments to managing customer notifications and generating Direct Debit reports. All of these stages work together holistically to ensure that errors are minimised and tasks are less time-consuming. 

Automated Direct Debit software connects with Bacs financial networks to provide protected and systematic transactions. Additionally, this software integrates with your accounting and internal systems to support improved financial management and deliver timely updates. The automation element of the software also reconciles (checks information accuracy) transaction data to create precise records. 

Why invest in automated Direct Debit software?

Undoubtedly, payment automation will help your business collect funds faster from customers and eliminate the need for paper-based payment administration. 

The benefits of Direct Debit managed services that use automated software are clear for organisations searching for watertight payment methods that are consumer-friendly and compliant. 

Key advantages of automated Direct Debit software include:

1. Predictable cash flow

Forecasting finances can be difficult to get right for enterprises. Without access to consistent cash flow and reliable information regarding your finances, future predictions may not be as concrete as you would like. 

With automated Direct Debit software, payments are tracked, managed and controlled to ensure you receive revenues when they are due, helping you prepare for target setting which allows you to access strategic opportunities. 

Through automated recurring payments, businesses can be more certain when funds will be available so financial budgeting is typically accurate. 

2. Minimised administration

Payment oversight is a drawn-out process that can take up much of your financial team’s workflow. If you work with a Direct Debit service provider, not only do they remove these time constraints, but they also implement automation so that payments are tracked to ensure they complete on the agreed date. 

If your teams are still chasing payments and trying to locate transaction information, this can take them away from meeting targets and enhancing customer service protocols. Plus, when errors are reduced, customers are more likely to return for your goods and services, without feeling frustrated that incorrect payments have taken place. 

3. Increased security

The Financial Conduct Authority (FCA) regulates organisations that offer Direct Debit as a payment method. FCA rules provide guidance for businesses in relation to customer protection when they pay using this method. Customers are protected from erroneous payments with the Direct Debit Guarantee.

What’s more, enterprises also benefit from the increased security and protection offered by automated Direct Debit software. 

Once payment authorisation has been given by the customer, enterprises receive revenues from customer payments and accompanying transaction administration in user-friendly formats to support operations and growth opportunities.  

4. Reduced payment failure

If a Direct Debit is for a regular payment, then customers have agreed to a set amount leaving their bank account on a certain date. As a result, customers understand that funds must be available in their bank account on the scheduled date to cover this payment. This awareness helps to reduce payment failure. 

In addition, customers have the power to cancel by contacting their bank. Organisations are informed of cancellations through the Automated Direct Debit Amendment and Cancellation Service (ADDACS) report. 

This helps businesses amend their records to ensure payments are not taken after cancellation and supports a clearer understanding of the enterprise’s financial landscape. 

5. Enhanced customer experience

Customers want easy, convenient ways to pay for goods and services. They also want to trust in the payment method and be reassured that their data won’t be compromised or that they won’t be mistakenly charged for products they have not agreed to use. 

Most customers these days will be paying for something using Direct Debit. Consequently, they trust the service, find it reliable, and appreciate its simplicity. If you can offer it to them, customers seeking peace of mind are likely to appreciate this payment option.

Lead with automated Direct Debit software from Interbacs

Securing streamlined and efficient payment processes can be a lifeline for busy organisations. At Interbacs, we have the insight and experience to align with your business objectives and provide intelligent Direct Debit services that empower you to access fresh opportunities. 

We successfully manage Direct Debit payment systems for organisations from various industries, from start-ups to large established multinationals. With a renowned industry reputation, Interbacs are ideally positioned to support all of your business account needs and help you enhance revenue streams. 

Ready to make the switch? Contact Interbacs today for a personalised consultation and discover how we can optimise your processes.