Futrli's short guide to managing direct debit cancellations

Read our guide on how to best manage direct debit cancellations in your business.

As a (small) business owner, you are likely to encounter direct debit payments being cancelled. Direct debit services can be cancelled at any time, however, a bank does need one day of notice before the upcoming payment date of the recurring payments. To be safe, it is advisable for customers and companies to have written confirmation of customers cancelling direct debits. Cancellations will always happen, so it is crucial for (small) business owners to make sure they know how to handle them. This is why we've compiled this short guide to some of the most important points regarding direct debit cancellations.

Credit card
As a (small) business owner, you are likely to encounter direct debit payments being cancelled.

How to best deal with direct debit services being cancelled - our 4 top tips

  • You will be notified of a cancellation by ADDACS message. Make sure you receive an ADDACS message once the customer has cancelled. These messages get issued by banks after a mandate gets cancelled. Knowing a mandate is cancelled and having it in writing is key for small business. Direct debit can otherwise be an unreliable payment method.
  • Once a client has cancelled their direct debit you are obliged to cancel their direct debit scheme immediately, or at least within three working days of the ADDACS message.
Person typing on laptop
If your client decides to cancel a direct debit payment, do make sure they have also approached their bank about this.
  • If a customer decides to cancel their direct debit, which they can do at any time by approaching your or their bank. So, if your client decides to cancel a direct debit payment, do make sure they have also approached their bank about this.
  • If the cancellation cannot be enacted before the next upcoming payment, customers might try to claim indemnity. Again, it is crucial to hold on to records, such as ADDACS messages to be able to react to claims.

Direct debits can be a great payment method for small businesses. However, it is crucial that the cancellation process is regulated and done thoroughly. If you have any questions, Futrli is here to help.

Get business advice here

Our blog holds tips, how to’s and general business advice.

Accountants

5 ways to sell your clients on advisory services

Accountancy firms need to act quickly to ensure that they offer their clients a range of advisory services, move with new trends, and increase revenue sources.

This is some text inside of a div block.

Heading

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat.

Accountants

5 ways to sell your clients on advisory services

Accountancy firms need to act quickly to ensure that they offer their clients a range of advisory services, move with new trends, and increase revenue sources.

Small Businesses

How to prepare your small business for MTD (Making Tax Digital)

Find out what MTD for ITSA means for you and how to MTD-proof your small business.

Futrli News

Futrli has been acquired by Sage!

Sage's acquisition of Futrli is part of its continued strategic approach to support accountants from proposal to advisory services.

Business

What is a Purchase Order (PO) Number? Everything you need to know

PO Numbers are a crucial detail required for Purchase Orders and Invoices, helping identify and manage your customers purchase journey.

Finance

Total Cost: Formula, Definition & Examples

Identifying your Total Cost can be crucial in understanding your business's profitability. Learn how to properly evaluate your Total Cost performance.

Business

Break-Even Point: Definition, Formula & Examples

Understanding the Break-Even Point Formula will help your business manage its costs and improve your financial future. Find out more!

Finance

Interim Invoice: Definition, Examples, and How to Use

An Interim Invoice is when you're requesting a partial payment, often for a partial delivery of a service or instalments on a large project. Click to learn more!

Business

What is a MIS Report? Meaning, Types & Examples

MIS Report stands for Management Information Systems, it's an encompassing term for a set of reports that allow the business functions to be analyzed.

Business

What Is Credit Control? Definition, Process & Procedures

Credit Control is the process of extending credit to make sales or services more attractive to a customer which in turn can increase sales numbers.

Finance

The Prudence Concept In Accounting | Definition & Guide

Prudence concept is a concept of accounting that increases the trustworthiness of figures reported in the financial statements of a business. Click to learn more!

Business

What Is A Close Company? Definition & Rules

A close company is a UK-based business where 5 or fewer individual participators have ownership or control over the business. Read on to learn more!

Forecasting

What is the Sortino Ratio & How to Calculate It

The Sortino Ratio is a way to measure the return on investment by just looking at downside risk to better measure risk-adjusted returns.