This effects clients who pay us monthly.
Over coming months Whitefield will be migrating our clients who pay by Standing Order monthly to Direct Debit.
This post explains more about the process, timetable and rationale. You do not need to do anything at present.
Whats Changing and Whats Not Changing
Instead of collecting monthly payments by Standing Order we will be doing so by Direct Debit. Many people don’t fully understand the difference, so we’ve explained more about this below.
The amount you pay us, the date you pay us and your total fee will not change.
Although liable to change, our plans are:
- September 2018 Beta test with a batch of 20 or so clients
- October 2018 continue Beta test and start using Direct Debit for new clients
- November 2018 migrate remaining Whitefield clients (now quarter 1 2019)
Historically using direct debit was difficult as you needed (a) bank approval and (b) software. Our predecessor firm was approved about 12 years ago, but we never took it further.
More recently there are easier to use systems in the market, the most prominent being GoCardless, who have an impressive customer profile from small businesses to government. Three of our suppliers use GoCardless to collect from us, covering an interesting spectrum of businesses from quoted company, through national private company, to a local supplier on the Island.
Whitefield will not hold your bank details. GoCardless arrange mandates, securely store bank details, and apply for payments.
As with any Direct Debit you can cancel it with your bank at any time.
With Whitefield you also have the security of dealing with a regulated firm. Our regulator is Association of Chartered Certified Accountants.
For now, you do not need to do anything. We will let you know when the time arises to migrate your account. This is just a pre announcement at present.
At the appropriate time we will ask you to:
- Cancel your Standing Order to us (please, please, do not do this until we ask)
- Authorise an online Direct Debit Mandate sent to you by email – this is a very quick process, just requiring your bank details
Standing Order v Direct Debit
The difference between Standing Order and Direct Debit isn’t always well understood.
Standing Order – is an instruction you give to your bank to make a payment regularly. The instruction comes from you, and you control dates, amounts and references. Histrionically the business being paid – us – would have given you a template letter to complete and post to your bank. The more modern approach is to give you banking details and ask you to set the payment up in your Internet Banking. This later approach is, however, somewhat fraught with difficulty and we get many payments coming through with the wrong reference, date, amount or account details.
Direct Debit – is a mandate you give to a business, in this case Whitefield, to take variable amounts from your bank account. It is a requirement that we tell you in advance of any changes, and if a payment is taken in error you can ask us, or your bank, for a refund under the Direct Debit Guarantee
Rationale for Change
From our perspective, the move away from pre printed forms for standing orders towards giving people the details and asking them to set the payment up in their Internet Banking, has seen a sharp increase in error rates:
- Incorrect dates being used (we work on a consistent 5th of month, but many payments come through on other days, including first working day and last working day)
- Incorrect accounts being used – we operate separate banking for standing orders, but often people have details of our main account on their banking and set Standing Orders up to there. The contrary happens and people pay invoices outside of Standing Order arrangements to our Standing Order account – we always reconcile this, but it creates a delay in identifying the payment, and creates risks of missallocation – it creates a lot of work as well.
- Incorrect references – our accounts system needs references in a precise format, as does any computerised system. The references come into us quite randomly, and incorrect to varying degrees, leading to a time consuming manual process to correct them and, of course, risk of errors.
- Incorrect amounts – this is a lesser problem, but does happen.
From your perspective as a client there are several advantages in the move to Direct Debit:
- Easier to set up – you don’t have to enter precise details into your Internet Banking
- Reduced error rate – we pester you less about queries, and reduced chance of missallocations
- Less admin if things change – if we need to adjust the fee you pay us, or stop collecting it, we can handle all of that. Currently you have to change things in your online banking.
- If payments need to cease, we can action that rather than it having to be you – a surprisingly high number of people don’t cancel standing orders when they cease to trade or move accountants.