Billing by Direct Debit?

**pr1** · 27 April 2022, 08:16

Originally posted by dankmemes View Post

I am an outside contractor working with agencies in London. For the little ones who still run manual payments, I often have to remind them to pay me.

Does anyone charge their agency or client via Direct Debit? Given I have a fair bit of weight now, I can make this a condition of new contracts.

Drawback of course is 1% fee through GoCardless, but that's the cost of money now.

Interested in hearing any thoughts or success stories on this.

I've never heard of it, but is 1% fee really worth less than the time it takes you to remind them to pay you? It sounds like a lot if you are invoicing for weeks or months at a time. I guess only you can evaluate the answer to that

**TheDude** · 27 April 2022, 08:19

What sort of reminder are you sending you sending?

Here in Essex we find the type of reminder that arrives in a couple of Transit vans most effective and it only needs to be sent once.

**WTFH** · 27 April 2022, 08:31

Being paid on a monthly direct debit doesn't sound very outside to me. It's almost the same as being paid as an employee - there's no checks or sign-offs, it's automatic. I would advise against it, and work on your business management skills, e.g. make your contract payment terms clear, and put in penalty clauses for delays of more than x weeks.

You say you have a "fair bit of weight now", but it looks like you've only been contracting for a couple of years. Unless they only have single digits of contractors working through them, then you don't really have as much weight as you might think.

**dankmemes** · 27 April 2022, 09:01

Originally posted by WTFH View Post

Being paid on a monthly direct debit doesn't sound very outside to me. It's almost the same as being paid as an employee - there's no checks or sign-offs, it's automatic. I would advise against it, and work on your business management skills, e.g. make your contract payment terms clear, and put in penalty clauses for delays of more than x weeks.

Direct Debits have nothing to do with IR35 status. It is simply a means to collect on an invoice. They're as "automatic" as taking payment 14 days after the invoice is raised. Businesses use them all the time. What are you talking about?

Originally posted by WTFH View Post

You say you have a "fair bit of weight now", but it looks like you've only been contracting for a couple of years. Unless they only have single digits of contractors working through them, then you don't really have as much weight as you might think.

What's your goal here? One can do a lot in three years, especially with a niche. YMMV but I am confident of my position.

**pr1** · 27 April 2022, 09:11

Originally posted by dankmemes View Post

Direct Debits have nothing to do with IR35 status. It is simply a means to collect on an invoice. They're as "automatic" as taking payment 14 days after the invoice is raised. Businesses use them all the time. What are you talking about?

What's your goal here? One can do a lot in three years, especially with a niche. YMMV but I am confident of my position.

WTFH like many posters on here, likes to give answers and opinions to questions that aren't asked more than the ones that are asked. I think it's some kind of self-assertion thing - you just have to get used to it

**dankmemes** · 27 April 2022, 09:13

Originally posted by pr1 View Post

I've never heard of it, but is 1% fee really worth less than the time it takes you to remind them to pay you? It sounds like a lot if you are invoicing for weeks or months at a time. I guess only you can evaluate the answer to that

That 1% is worth it, the cost of money now vs money later. The reminders aren't that much, but reminding them less than 7 days post due seems a bit desperate.

**eek** · 27 April 2022, 10:03

Originally posted by dankmemes View Post

Direct Debits have nothing to do with IR35 status. It is simply a means to collect on an invoice. They're as "automatic" as taking payment 14 days after the invoice is raised. Businesses use them all the time. What are you talking about?

What's your goal here? One can do a lot in three years, especially with a niche. YMMV but I am confident of my position.

Drawback is no-one is going to give a small company direct access to their bank account and that is what a direct debit offers.

Now I do know firms that use gocardless but that is more alongside things like stripe and they target a different demographic.

**Lance** · 27 April 2022, 10:07

read this The Direct Debit Guarantee – Securing your Direct Debit payments

It's probably easier to just to dun late payers.

**eek** · 27 April 2022, 10:10

Originally posted by dankmemes View Post

That 1% is worth it, the cost of money now vs money later. The reminders aren't that much, but reminding them less than 7 days post due seems a bit desperate.

Nope, always remind the day after it's due. The earlier you chase up payment the quicker you will be paid.

And if you don't chase up a previous late payment you can end up being placed in the "don't need to rush to pay" list which could be your problem here.

Billing by Direct Debit?