When should you use standing order to take payments, and when Direct Debit? We asked GoCardless’ Rachel Astall.
Direct Debit and standing order are both recurring payment methods. So, what’s the difference and when should you use them?
The biggest difference is in the way the money is transferred to your account from your customers’ bank accounts. With standing orders, the customer pushes the money from their account to yours, with Direct Debit, you pull the money from the customer’s account each time a payment is due.
This might seem like a subtle difference, but it can have a surprising impact on your business cash flow. We spoke to GoCardless’ Rachel Astall to find out more:
Explaining the differences between Direct Debit and Standing Order
Rachel’s advice is that Direct Debit is certainly a better fit for businesses looking to take regular payments and this comes down to three main advantages
- With Direct Debit you can change the payment amount and the date on which you take the payment whenever you need to, without the customer having to action anything, or authorise the payment again.
- Direct Debit puts you in control of your payments. Instead of waiting for a customer to manually organise the payment, you pull the funds from their account whenever a payment is due.
- With a Direct Debit, you can set-up automatic notifications for payments that fail, and see the real time status of payments – allowing you to take action immediately.
- By accessing Direct Debit through our preferred provider, GoCardless, you can integrate Direct Debit payments in to your QuickBooks acounnt, and automatically reconcile them against your invoices – so no more manual bookkeeping.
To add Direct Debit to your payments mix, check out how GoCardless for QuickBooks can help your businesses, over at the Apps Store.