Minimising unpaids

With a growing number of Direct Debits being processed every year  there will always be some that are returned to you unpaid. There are many reasons why they are returned. The most common occurs when attempting to collect a first payment before the Direct Debit Instruction has been accepted by the bank. Other reasons include lack of sufficient funds. Therefore it remains extremely important that you have an accurate database of payers at all times and that you utilise all available reporting services from your bank.

Here are some high level best practice tips to follow:

• Don't guess when trying to enter illegible data for a new Direct Debit Instruction. Check it out. A phone call takes a minute or two and cost only pence, handling an unpaid problem can take hours and costs pounds
• Ensure you have modulus checking routines on your system
• If you receive an unpaid owing to insufficient funds offer a change of payment date to the customer (if your systems allow). This puts the customer in control by giving them the option to co-ordinate the payment date to suit their individual needs and availability of funds
• Ensure your letters to customers are appropriately worded to reflect the reason for the unpaid Direct Debit
• Act on ADDACS reports immediately. They are there to tell you to update your Direct Debit database. Failure to act could result in an unpaid
• Take advantage of fully automated ADDACS where details of amendments and cancellations are delivered via email. These can be downloaded and automatically applied to your Direct Debit database reducing the possibility of re-keying errors and subsequent unpaids.