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Standing Orders

I'm looking for advice from those of you whose clients pay by standing order (or direct debit for that matter).

So far my clients have paid when I raise an invoice but for a more even cash flow and less chasing of clients for amounts outstanding, I decided that now is the time to move clients onto paying by standing orders.

I have already considered direct debits but the cost is the problem in that case.

So how do I go about it?

Do I just contact my larger clients or would every client be happy to pay monthly?

I was going to write to my clients and enclose a standing order mandate for completion but what about terms and conditions, are there any templates out there that I could use?

Any advice would be much appreciated.



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Putting my client hat on ...


Putting my client hat on for a moment, this would be a pain in the a*se!

Each month I will have to process a bank transation with no supporting paperwork, build up a wrong way balance on my purchase ledger account for your company and then (presumably) clear this balance when your invoice comes in using the "credit" I have built up in the meantime. Meanwhile my bank will want to charge me x pence for each payment. And the VAT, I suppose I wait for your invoice before processing that (assuming you issue VAT invoices)?

Seems like a whole load of work for nothing. Send me the bill, I will just pay it!

My £0.10 worth.



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08th Feb 2012 15:24

Thank you for your comments Captain.

Firstly I am not VAT registered so that is not relevant anyway.

Your comments seem to refer to clients using software packages but for those who don't they will just see a payment coming out of their bank account each month and if they write up a cash book that's 12 items a year to write up.

If I offer my clients a discount then this would more than cover any fees charged by their bank.

Its the clients that find it hard to pay my fees in one go that I would hope would agree to Standing Orders.



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By thomas
08th Feb 2012 16:02

I send my clients an invoice on the 1st of the month for their starnding orders. I sell it as a 12 mth package. They get access to me for quick phonecalls etc all year as well as their accounts and tax.  Many prefer being able to split the bill over 12 mths.


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By Monsoon
08th Feb 2012 16:27

It's not a monthly payment on account!

The easiest way to look at it (and indeed structure it) is so that they aren't paying on account, but they are paying a monthly invoice for a monthly service that just happens to include year end accounts in whichever month that happens to be.

We looked into DDs and decided against it. I have a standing order mandate which I get the client to fill in, sign and then we post it to their bank, so we know it's going to get put in place. This only works for those on monthly fees and sometimes you get ad-hoc extras which is where DD is superior, but standing orders have definitely improved our cashflow and clients seem to like it.

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08th Feb 2012 16:34


If it is a monthly service then do you have to raise an invoice every month for every client, it seems like an awful lot of paperwork?

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By Monsoon
08th Feb 2012 16:39

Automated invoicing ;-)

It's not a lot of paperwork if you use software that automatically issues monthly invoices ;-)

I'm now sufficiently fed up of the monthly invoice run (though it's a fine price to pay for better cashflow) that I am going to buy some of said software....!

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DD on account for me .....

and not a strange concept for most people as nearly everyone pays for their utilities in the same way. All DD's run April to March and they get invoices when I do the work be it annually, quarterly or monthly. My fees are all fixed with ad-hocs rarely being charged separately for so it works fine. Big advantage is that fees go up by inflation each April (per Engagement letter) and I simply change the collection amount at my end in about 30 seconds. 

Which ever way you go it takes work at the outset but I now have £10k in my bank account rather than on the debtors ledger which makes me very happy! The few clients who were reluctant have nearly all moved across once I offered them instalments on this year's bill so don't be too anal at inception ... most come around and then you have them for good!

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08th Feb 2012 16:46


Why can they not just be payments in advance/on account with an invoice at a later date?

Isn't that what the utility companies do?

Does it matter that I'm not VAT registered?


(EDIT: sent before Steve's comments)

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08th Feb 2012 17:15

50% of our client

I would hazard a guess that 50% of our clients pay this way.  Our debtors listing is pretty small and we have £30k sitting in a "collection" account which offsets our overdraft and no bank interest to us.

Clients are pretty happy as they don't have to find a large chunk in one go.

The only problem we have is where the SO is set up after the invoice has been issued.  We make it clear the invoice needs settling first and the SO's go against future invoices.  Doesn't always work!

From the clients point of view, they are payments on account and the invoice is submitted to them at the time of forwarding them their annual accounts or tax return.

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Similar but be careful

Similar to others we just issue one invoice in April for the anticipated year's work ahead (including all contact) and they have the option of 30 days or 10 monthly instalments ending January.  Most take the latter option organising it themselves via online banking, but I've been pleasently surprised that many can't be bothered and pay in one go.

We have never had any query or problem from clients over effectively paying some of the money in advance of the main bits of work we do on say the accounts or tax returns and we sell it as an ongoing support service.

We use a checklist (within Iris) to plan & monitor this, sending reminders if clients don't tell us in a week or two which option they are taking and I've not had a bad debt or significant overdue payment in years.

Two things to watch out for.  If you are a member of a reg body, and don't operate a client bank account, there may be an issue over receiving money in advance ie without an invoice.  The ACCA specifically checked for this when they "dropped in". 

Secondly, if you do only issue one invoice and then ask to be paid by >4 instalments in a year you might be breaking consumer credit law (except for ltd company clients I think), ie you need a Consumer Credit Licence to offer the credit.  If you are a member of a reg body though you should be covered by their group licence.

As to terms & conditions I'm a firm believer in just setting it all out step by step to your clients in a way that they understand.  Mine appreciated this and I got some good feedback on "what ifs" enabling me to fine tune it.  I ran it passed a solicitor client who picked up the CCL risk but, in reality, if you have a good relationship with clients and it's written in clear terms, you won't have a problem.

Have been considering online DDR services to save some of the admin but the costs are still high for what is an electronic transaction (there have been several postings on DDR arrangements on Any Answers in the past).

Good luck

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DD might have just got a whole lot easier

My practice used STO's for all new clients and most existing ones. Works great. However, we would always have preferred to use DDs as these are much easier to manage, when wishing to increase for inflation, for instance.

Previously, it was not easy to get DD facilities. A new provider promises to make things much easier and cheaper now.

We are checking this out, so I can't yet report on how this new service works in practice, but it certainly looks just the job.


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Thanks Adrian - typical of me I dived in with both feet 1% charge per transaction £2 max, was too good to miss.  Read it up, signed up, entered banking & company details etc, got the confirmation email etc etc and was directed to the developer's section......what the hell is the developer's section?

Anyway long story and online chat later, you have to sign up via a developer (Kashflow use it) and I'm sure with your knowledge of APIs, strings, scripts it will be a doddle but as an accountant it was a waste of my time.

The nice man on the chat (Alan) said they are developing the bit of the website for non-techies like me and apologised if the website was misleading.

Holding my breath as it does look good.


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09th Feb 2012 12:38

I would love direct debit...

... but my bank (Santander) won't let me, as the last time I enquired, it was only available for businesses with £1m+ t/o.

Standing order works fine, but it would be nice to increase fees annually from our end.


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By Monsoon
09th Feb 2012 16:44

Richard - you don't use your bank

As you rightly say, banks aren't interested unless you're big business.

Us little businesses would use someone like Eazipay, or FastPay, who process the DDs on your behalf.

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20th Feb 2012 10:20

Simple Direct Debit integration without any technical hassle

First Capital Cashflow offer a range of Direct Debit solutions to SMEs. I appreciate the last thing you want when you’re outsourcing is extra work with developer level integration. You need the full support from an experienced company that has a tried and tested means of ensuring they can get things right first time and started quickly.

It worth giving First Capital Cashflow a call, I’m confident a quick chat with one of the sales team and you’ll be safe in the knowledge Direct Debit is something you can use no matter what your size at affordable prices but more importantly with dependability ensuring cash flow is improved.  

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By roblpm
20th Feb 2012 11:07

DDs are not that expensive

We use a Company called to do our Direct Debits. The key is to do them all on the same day of the month, then you only pay 1 charge file. We have nearly 100 clients on DD and its only about £50 a month. All processed online, works fine.


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Similar with Fastpay ...

fixed fees i.e. no charges for additions / deletions / bounce backs etc. I also pay £50 ish for up to 100 collections per month .. equates to about 1% for me.

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Ive had a quick look at Eazipay and it seems pretty good but the only issue I had was that on the clients bank account it suggest it will show up as Eazipay Ltd - XYZ Accountants?  My initial thought was that clients are going to be on the phone enquiring what this is even if I specifically tell them Im using a 3rd party company!

Has anyone else had this?

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21st Feb 2012 11:02


I use Eazipay and have never had a client query whats on their bank statement-I think most of them realise that DD services are administered by third parties, so go for it makes life easier!

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SO's for me but DD option looks good

BigDave - PM me for a standing order mandate.

I use Xero accounting software and have repeating monthly invoices for clients who pay monthly by SO. Very easy - client gets e-mailed with the monthly invoice and I get cc'd so I know exactly what has gone out when.



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