1. Helps Bring Down Late Payments
With most parents juggling busy work schedules, it’s common for many to miss invoices in the mail or forget payment dates. Direct debit ensures the payment is automatically deducted from their bank account on the due date – without the parents having to step in and take action.
2. Ideal for Recurring, Variable and Ad Hoc Payments
Contrary to common perception, direct debit is suited for recurring, variable and ad-hoc payments. Once you have the initial authorisation (direct debit form or mandate) from the parents, you can automatically deduct recurring or one-off payments of any amount after notifying the customer in advance.
3. More Cost-Effective than Card Payments
While card payments can cost you around 3-5% per transaction, direct debits offer cheaper rates of 1-1.5% per transaction depending on the direct debit provider.
4. Increased Flexibility and Tracking Options
Specialist childcare direct debit providers now offer customised solutions that specifically address the pain points of childcare providers. For instance, if you are an after-school club offering multiple payment options, you can continue to give parents the flexibility to pay part of the invoice using other payment options, if they wish to.
Cheqdin provides a unique feature where the parents can amend the direct debit amount directly from the online invoice before the payment date is due.
The parents will be given the option to manually amend the invoice amount, and enter the sum they wish to pay as direct debit. They can then pay the remaining amount using an alternate payment method such as childcare vouchers. And, you can monitor the status of the transaction and the amount that is credited into your account using your payment dashboard.
Now, what happens if the parent does not take any action on the invoice? The full invoice amount will be automatically debited from their account on the due date.
As banks typically take 3-5 days to process each transaction, the tracking feature allows you to monitor the payment processing status during this period. This can help you make early decisions on what payments to follow up and when, and not wait till the funds finally reach your account.
5. Brings Down Admin Time
Depending on the provider you opt for, you can automate the tedious payment reconciliation process and bring down the time spent on manually cross-checking the records with your bank statements.
6. Lower Chances of Payment Failure
According to Gocardless, about 3-5% card transactions fail each month due to card expiry or cancellation. As direct debit uses a customer’s bank details, payment failures are typically less than 1%.
7. Cuts Down Printing Costs
Using paperless direct debit helps you cut down on paper, printing costs and postage. It’s not only environment-friendly but also allows you to manage your time and expenses efficiently and streamline your business.
8. Easy to Set Up and Use
Direct debit is often perceived as a complicated payment solution suited for big organisations. With Cheqdin’s integrated payment solution, you can set up direct debit instantly, irrespective of the size of your setting. The invoicing and payment solutions are simple, easy-to-use and available as monthly subscription packages to suit the size and requirements of your childcare setting.
Interested in switching to paperless direct debit? Get in touch with our friendly team for a quick demo to find out how we can help you transform the way you collect your payments.