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How a direct debit facility for your business can improve cashflow

Caroline Mense from Legal Enablers speaks with with Stephanie Morgan from the Bank of Melbourne on how a direct debit facility can speed up your cash cycle.

Caroline: Today we meet with Stephanie Morgan, Transaction Banking Manager at the Bank of Melbourne. Hello Stephanie, can you share with us your top three tips on how a direct debit agreement speed up your payment cycle?

Stephanie: Hello Caroline, here are my top 3 tips:

Tip 1: Control your cash flow

Common feedback that I receive from businesses is that they would like more control of the timing of their payments. Billings and debtors may be high, but it’s the delay of receiving these funds that can cause strain on the cash flow of a business. It only takes a few large debtors to draw out the payment days of a business and hinder effective management of cash flow.

Tip 2: Make it easy for customers to pay you

As a business, the more convenient you make it for your client to pay you, the sooner you can expect to receive the payment. Bank of Melbourne offers a receivables solution, PayWay that automates payments via direct debit for once off or scheduled payments, for variable and non-variable amounts.

Direct debit is a solution that can speed receipt of funds and give business owners more control of their cash cycle and save time spent reconciling payment received by cheque or direct deposits. You can collect regular payments from your customers on the date they are due saving you time and effort.

Tip 3: Set payments at regular intervals

Direct debit might be a solution to consider offering your clients who may be struggling to pay a specific invoice and would like the payment spread over a number of smaller incremental payments. The steady payments can be of benefit not just to your clients, but to your business as well, particularly if your industry is affected by seasonality.

Caroline: Can you tell us about the Bank of Melbourne solution?

The Bank of Melbourne solution, PayWay Recurring Billing, gives businesses the ability to set direct debit plans for both bank accounts and credit cards. It also generates the paperwork needed to meet APNL standards as well as a number of other features and secures client information via an

online environment.

Stephanie: Can you tell us how Legal Enablers helps businesses with their cashflow?

Caroline: Legal Enablers prepares direct debit agreements and authorities so that you can improve your cashflow. We prepare Terms of Trade which clearly states the scope of work and documents when and how you will be paid and we have debt recovery services.

Contact Stephanie and Caroline:

Caroline Mense Stephanie Morgan Princpal Lawyer Transaction Banking Manager Legal Enablers Bank of Melbourne

Ph: (03) 8691 3128 Ph: 0434 609 999

This article is part of Legal Enablers' Business Savvy program. The program collaborates with other businesses to teach skills to help our clients grow.

Disclaimer: The material in this article is general in nature and is not intended as legal or financial advice. For information for your circumstances, please seek legal and/or financial advice.

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