itsolutions started this topic @ 18:05 on 23/11/2006
I'm in the process of setting up a new company, and we're looking for a business bank account that will allow us to get paid by our customers by direct debit. Plently of banks will allow you to pay other people by DD, but not the other way around (it seems).
Can anyone recommend a bank that will allow us to do this? The new company will be a start-up, but no overdraft or loans will be required.
Many thanks,
Andrew.
------------------------
IT Solutions Ltd - Custom Software & Websites for Your Business
RE: Business account that allows direct debits from customers
DirectDebits | 24/11/2006 09:05 AM
Hi Andrew
This is our specialist field. You'll find that the banks will not be prepared to do more than give you an account with the usual features - they will NOT allow you to collect money by Direct Debit (have what is called OIN status). This is because they have three overriding criteria: they have to sponsor their customer into the system, then they have to indemnify the system against their customer and finally they have to make a profit. The long and the short of it is that new and small businesses are too much of a risk for steps one and two and certainly won't meet the need for step three!
We on the other hand have negotiated with a major provider of DD services to large business (ie not a bank!) who take a refreshingly simple view on such matters - basically they ask us to profile the prospective client and submit a proposal form for them to evaluate. Usually they will then offer a contract. We charge a simple Brokerage Fee and, for new starts, are usually willing to even allow payemtn of this in instalments by DD if appropriate. Our fee is totally refunded if we are unable to obtain an offer of service.
If you're interested then drop me an eMail and we can take matters further.
Tim
------------------------
Remember: Turnover is Vanity, Profit is Sanity BUT Cashflow is Reality! We are unique in that we can provide access to the collection of cash by Direct Debit to all sizes of businesses even new starts. We help business claim back control of their cashflow from their customers and pull it back into the business where it belongs. Check us out - we're here to help. 0870 747 0800
RE: Business account that allows direct debits from customers
James Smith | 24/11/2006 09:58 AM
Would agree with Tim here (don’t let the fact he has his sales hat on job detract from his post which is right on the money) a start-up will really struggle to get DD's in their own right. You would probably need some good backing from an existing business with the same participants etc to swing it. If you are a “nobody” as far as the bank is concerned then you can pretty much forget it.
The banks are a lot better than they where on this issue 5 years ago, but fundamentally you do need 2-3 years history and a chunky turnover before they will be willing to help you. You would also need a "proper" bank, rather than someone like Abbey who are great for no-frills free banking not so good when it comes to these types of services.
One slightly different option would be to use recurring payments from something like Worldpay which is easier to get into if it’s the same amount every month.
Regards,
------------------------
James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773
---------------------------
Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT
RE: RE: Business account that allows direct debits from customers
DirectDebits | 24/11/2006 12:24 PM
Good points, especially about the need for a 'business (proper) bank'.
By the way, I am speaking from personal experience - I was turned down once too often by 'the banks' and that lead to being in the position where we are today - to coin a phrase: "I wanted it so badly I built the business!"
WorldPay as an organisation is good but you need to be aware that they only collect money from Credit and Debit cards, their average time before payout of money is four weeks but for new businesses is more usually 8 weeks and they chage 4.5% of each creditcard transaction. When you include their set-up and other cinto the bargin we actually prove to be very cost effective (Oops! There goes that 'Sales Hat' again!).
Regards
------------------------
Remember: Turnover is Vanity, Profit is Sanity BUT Cashflow is Reality! We are unique in that we can provide access to the collection of cash by Direct Debit to all sizes of businesses even new starts. We help business claim back control of their cashflow from their customers and pull it back into the business where it belongs. Check us out - we're here to help. 0870 747 0800
RE: Business account that allows direct debits from customers
jamescrunch | 24/11/2006 11:43 PM
Hi Andrew,
It seems to be a very common experience for most start-ups. This means that your bank will only let you accept cheques or online transfers. One important thing to remember about this, is that many start-ups are in the same boat. That means if you do a lot of business with start-ups or companies who only recently obtained these facilities they will completely understand your situation.
James
www.crunchmarketing.co.uk
