Direct debit and standing orders are two payment methods that aim to help you ensure flawless cash flow. Having almost the same features and same purpose, they often confuse many people who want to accomplish regular payments from their clients or pay their utility bills monthly.
But, what is the difference between a standing order and a direct debit? Let’s find it out here.
A standing order refers to an instruction that you give to your bank to pay your bills or other necessary payments at regular intervals. Depending on your requirements, you can set it weekly, monthly, or quarterly, or annually basis.
Using a Direct debit, your clients can authorize you to take money directly from their bank account on a set payment date. The amount and frequency of direct debit payment can vary depending on your specific needs.
Find out the Difference
As mentioned earlier, standing orders and direct debit are modern and automatic ways to collect and make payments directly from respective bank accounts regularly. While they have several things in common, a few features distinguish them from each other.
It is easy to control direct debit and standing orders. As a customer, you can set up a standing order and choose its amount and frequency. Standing orders also allow you to either change or cancel it without having to notify you.
On the contrary, direct debits give you full control over the payment made through this method. It lets you decide on the frequency and amount of the money you want to collect from your customers. Direct debit also authorizes you to vary the amount and send your customers automatic notifications without any failures or cancellation.
After you know the difference between standing orders and direct debit, look at your requirements and cash flow system to decide the most suitable option for you.