Congratulations, you’ve just won a client who happens to need your services every month. And whether you’re renting them equipment, or charging them a monthly consulting fee—the best way to make sure they get continuously billed is with a Recurring Invoice.
But when it comes time to get paid for that invoice, they may have forgotten it was being sent, or they don’t want to pay for a subscription on credit, or worse yet – they may have insufficient funds. Long story short: It’s frustrating chasing payments.
That’s where Pre Authorized Debit Payments can help. They allow you to automatically debit a client’s bank account to withdraw funds when a payment is due (with their permission, of course). It’s simple, easy, and convenient – and sends the money directly from their bank or financial institution to yours.
A Pre Authorized Debit (PAD) is an easy way to collect an invoice payment on your client’s behalf. Just create a recurring invoice with PAD enabled, and when your client pays they can enter and save their bank details (one-time only). This allows you to then draw funds straight from their bank account, every time a recurring payment is due.
Right now, this feature is only available to Canadian based users billing Canadian clients using Stripe payments.
To enable the use of Pre Authorized Debit:
Now you’ll have the option to accept a PAD Payment on any Recurring Template:
Here’s what it looks like on an Invoice:
Note: When your client receives their first invoice from the Recurring Template, they’ll be asked a few questions to link their bank account.
PAD Payments, sometimes referred to as a pre authorized debit agreement, allow you to debit a customer’s bank account through bank-to-bank transfers. You send a client a pre authorized debit form, which acts as an agreement of the amount and time period you will bill. And then using a Recurring Invoice, you can charge their account for the agreed upon amount monthly.
Note: Different financial institutions have different processing times, so check with your bank.
Instead of waiting for a customer to send a payment, a Pre Authorized Debit gives you the pre authorization to withdraw recurring payments when they’re due. The result? No more chasing payments, or worrying about getting sent the wrong amount. Other benefits include:
If you have any questions on how to get started with Pre Authorized Debits, or any other payment method, feel free to reach out here.
This post was updated in September 2022.