What a Direct Debit is
A Direct Debit is an instruction that lets you collect money from a customer's bank account, with their agreement. The customer signs up once, then you collect each time you've done a visit, with no chasing and no card to remember. Small traders usually run it through a provider, because to collect directly you'd need to be approved by the banks.
How the ways to be paid compare
| Method | Good for | Watch out for |
|---|---|---|
| Cash | Quick, no fees | Hard to track, easy to lose, no record |
| Bank transfer | No fees | Customers forget, and you have to match payments to people |
| Card or Apple/Google Pay | Instant, easy for one-offs | A fee on each payment |
| Direct Debit | Regular customers, no chasing | Takes a few days to clear, and setup needs the customer to act once |
| Pay by Bank | Instant, direct from their bank | The customer has to approve each payment |
How it works
- The customer sets up the Direct Debit once, online, in a couple of minutes.
- You do the visit, and you ask for the money.
- Their bank takes a few days to send it, and then it appears in your account.
The customer is protected by the Direct Debit Guarantee, which means their bank will refund them if something goes wrong. The rules also require advance notice if you change the amount or the date, and your provider handles the wording.
What it costs
A provider charges a small amount per collection. GoCardless, which WorkWise works with, charges 1% + 20p per collection (maximum £4, plus VAT). WorkWise adds nothing on top. Compare this with the time you spend chasing and the money you lose when payments are late or forgotten.
Getting customers to say yes
Some customers hesitate because they don't want to give out bank details. Explain what's in it for them, and keep it simple.
Hi [name], I can now take payment by Direct Debit, so you don't need to remember to pay me after each visit. It's set up once in a couple of minutes, and your bank protects every payment with the Direct Debit Guarantee. Here's the link: [link]. Or if you'd rather keep paying another way, that's fine too.
- Offer it to every new customer at the start, when it's easiest
- Put it on your leaflet and website
- Never force it. Let people who prefer a card or cash keep doing that
When a payment fails
Direct Debits can fail if a customer's account is short or closed. You'll be told, the amount is owed again, and you decide whether to try again or ask for another method. Don't retry repeatedly. See chasing late payments.
Direct Debit and the quiet months
Direct Debit won't even out the year by itself: it collects what each visit costs, so a quiet month is still quiet. For steadier income, agree a fixed monthly price with regular customers. See surviving the quiet months.
Direct Debit through your own GoCardless account
Customers set it up once, and you collect after each visit. WorkWise adds no fee on top.