Managing by Exception – the beauty of SEPA direct debit
Imagine starting your day knowing most of your customers have paid you on time. You might have to call a few and that’s fine, you can make those few calls before 10 and then focus on things that are of real value to you, stuff that gets you fired up.
So what is managing by exception?
In short, it’s about setting up automatic collections in order to enable your customers to pay you on time each month. Where a collection is not successful, maybe your customer changed their bank account and forgot to tell you (or they're not using Debapay to collect on time, OMG), you react and contact that customer to ask if everything is ok and if you can submit the collection in the next few days.
It means your whole collection process is setup in such a way to minimise your involvement in getting paid, you only attend to collections that don't make it in.
Let's take an example..
Say you’re collecting from 100 customers, be it for fixed or variable amounts. You’re regularly checking your bank for credits that you then have to reconcile, trying to find out who out of that 100 has and hasn’t yet paid you.You then go through that list and call each customer once or twice or maybe more. As Tommy Jones well knows, it’s not unusual.. to see many businesses doing this.
Why not instead focus only on those say 5% collections that don’t make in! Open your PC in the morning, review the collections report and call those 5 customers. Imagine the freedom of mind that brings.
The value of automatic collections cannot be underestimated
In our other blog, Friends of Old, Direct Debit v Standing Order we cover the differences between both these payment methods, many people have found it useful. Standing Orders enable recurring payment but they’re restricted, cumbersome to setup and cannot be changed. SEPA direct debit enables businesses to setup automatic collections to debit customers on a particular date each month for fixed and variable amounts. Setting up is easy via electronic mandate, see our short demo here. Your customers could also sign paper mandates, ideal where you're customer-facing.
The value of automatic collections cannot be underestimated, simply put, it saves money. When you’re spending less time chasing people for payment and your money is coming in with no effort, you’re winning.
Happiness can be found in Exception Handling
We’re helping businesses who, prior to using Debapay, were spending significant time chasing payment. There’s no need for a lot it and they see that now.
We don’t suggest direct debit fits every scenario, businesses accept payment by various means and most of our customers have a mix of options in play. We see our customers strive to setup as many collections as possible on SEPA direct debit so as to minimise the pain and effort within their Credit Control functions.
If you think we can simplify even a portion of your collections do talk to us, we can quickly discuss how Debapay can help in your business.
You can call us on 0906400199 or feel free to book a short meeting, we're always happy to talk.