Setting up DD`s as the payee - missing something

[DSLiverpool]

The lovely guy at the bank has made this no clearer than ever but we have a few clients that want to pay by DD monthly for a 2.5% discount but do I send them a form with our details to give to their bank or ask them to fill in a form to give to our bank - or anything in-between.

Can someone explain as if they were talking to a 10 year old please

[Fore Left]

They give it to their bank. Your bank then requests the amount. You have to tell your bank what to collect. You must tell your clients the date & amount that will be taken in advance. If they're not (happy) they can request the money back.

www.directdebit.co.uk said:

What is Direct Debit?

Simply, a Direct Debit is an instruction from you to your bank or building society. It authorises the organisation you want to pay to collect varying amounts from your account – but only if you’ve been given advanced notice of the amounts and dates of collection.

https://www.directdebit.co.uk/DirectDebitExplained...

[Strudul]

Slight tangent, but is it possible for a direct debit to be setup to a personal account and is there any charge associated?

[akirk]

Fore Left said:

They give it to their bank. Your bank then requests the amount. You have to tell your bank what to collect. You must tell your clients the date & amount that will be taken in advance. If they're not (happy) they can request the money back.

In every DD I have set up I fill in the form as an instruction to my bank...
but then pass it onto the company to whom I am paying my DD - I don't give it to my bank
That company can then set up that DD, but as far as I am aware, they don't pass that paperwork onto anyone either - it is simply the mandate for the DD, and evidence for them to show that I agreed to it...

[MWM3]

Are you getting mixed up between direct debits and standing orders?

[DSLiverpool]

Thanks chaps were trying to do an online dd process

[MWM3]

DSLiverpool said:

Thanks chaps were trying to do an online dd process

If you do want to do DD and not SO you'll need to sign up with a provider to become a DD originator.

[RM]

Have a look at gocardless

[Thankyou4calling]

Go cardless is very good as above.

You can’t just set up a DD you need to be approved by a bank which isn’t easy as a DD allows you to dip into people’s account and take money!

Go cardless are efficient and cost effective.

[anonymous-user]

We use Gocardless with about 75 clients.

One limitation is that the standard limit is £5k, so if the invoices are going to be higher than that you're going to need to negotiate that with GC on a client-by-client basis.

GC also links to Xero, so paid invoices are automatically marked as such and reconciled.

[Countdown]

DSLiverpool said:

The lovely guy at the bank has made this no clearer than ever but we have a few clients that want to pay by DD monthly for a 2.5% discount but do I send them a form with our details to give to their bank or ask them to fill in a form to give to our bank - or anything in-between.

Can someone explain as if they were talking to a 10 year old please

You need to have a system set up in order to be able to request DD payments. When i used to work in prpoerty management we used something called AUDDIS

https://www.smartdebit.co.uk/auddis-explained-adva...

As others have said Gocardless is probably easier for smaller organisations.

https://gocardless.com/direct-debit/payments/

Alternatively you customers could just set up a monthly Standing Order. The difference between am SO and a DD - you have to request a DD each month whereas with an SO it pays automatically. Also with a DD you can request whatever amount you like so it's more useful than an SO if payments are going to be variable ( but bear in mind it's subject to the DD guarantee.).

[DSLiverpool]

Thanks all, far far more complicated than the idiot at the bank described.
He just gave me a form to give to a client.
Nothing over £5k yet but I live in hope!

[skilly1]

Another vote for Go Cardless. Very simple and cheap, we have 450 users on it.

[akirk]

DSLiverpool said:

Thanks all, far far more complicated than the idiot at the bank described.
He just gave me a form to give to a client.
Nothing over £5k yet but I live in hope!

if you were given a form with instructions for the client to hand it to their bank, that sounds like a standing order, an instruction for the client's bank to pay you a fixed amount of money at a regular interval, (eg monthly)

DD gives you the right to request money from the client's bank account, but while more flexible it has more strings attached to it...