This article explains how to correctly configure the direct debit settings in Simplicate and what to keep in mind. The following topics are covered (click the link to go directly to that section in the article):
How Direct Debit Works
In order to be allowed to collect payments via direct debit, your company needs a direct debit contract. You arrange this with your own bank. The bank will assess you for this purpose. Once approved, you will receive a direct debit ID, which must be entered into your accounting software. From the accounting package, you then set up the direct debits and submit them to the bank. This is done by sending SEPA batches from the accounting package to the bank.
Types of Direct Debits
There are two types of direct debits:
Standard European Direct Debit (SEPA core direct debit)
Business-to-Business European Direct Debit (SEPA B2B direct debit)
With the Standard European Direct Debit, the debtor has the right to reverse the debited amount within 8 weeks. With the Business-to-Business Direct Debit, the debtor does not have that right.
To use the Business-to-Business European Direct Debit, the debtor must sign a form for these debits and submit it to the bank.
Standard European Direct Debit | Business-to-Business European Direct Debit |
Collection possible from both business and private customers | Collection only possible from business customers |
Your debtors have a refund period of 8 weeks, regardless of the reason | Your debtors have no right to a refund |
Your debtors do not need to register their mandate with their bank | Your debtors must register their mandate with their bank |
Direct Debit Settings in Simplicate
To automatically collect an invoice from the accounting package, you need to configure the following settings in Simplicate:
Set the payment condition to ‘direct debit’ on the CRM record of the debtor. You can do this under the ‘invoicing’ tab of the CRM record. More information can be found here.
Enter the customer’s IBAN in the ‘invoicing’ tab of the CRM record.
Send the invoice to the debtor. The invoice must have the payment condition set to direct debit.
Note: The payment condition on the invoice takes precedence. If the invoice is set to ‘14 days’ and the CRM record is set to ‘direct debit’, Simplicate will use the ‘14 days’ payment condition from the invoice.Process the invoice to the accounting package.
SEPA Mandate Advice
You can obtain a SEPA mandate from your debtor in Simplicate. This is done by having the customer digitally sign a quotation, where you have the option to include a SEPA mandate for the customer to sign. This results in a SEPA mandate from the customer, authorizing you to collect payments. This authorization is for the Standard European Direct Debit type. More information about digitally signing quotations can be found here.
The SEPA mandate from Simplicate is not required in order to collect payments via the accounting package. However, Simplicate recommends using this functionality, as it provides you with a digital authorization you can fall back on.
Make sure to set the custom payment condition to direct debit during the sales process before sending the quotation for digital signing. If you do not set the custom payment condition to ‘direct debit’, no SEPA mandate will be sent to the customer.
This is the extent of what you configure in Simplicate for direct debit. When processing the invoice to the accounting package, the SEPA mandate—provided during the quotation signing—is automatically sent in the background along with the invoice. The invoice’s payment condition is also sent in the background.
From the accounting package, you then send the direct debit mandates to your bank in order to collect payments.
Note:
The actual direct debit is therefore sent from the accounting package to your bank, not from Simplicate. For questions on how to do this, we advise you to contact the provider of the accounting package you are using.
When using direct debits, a refund period applies. You can read more about the duration and details of this refund period in this article.
Simplicate’s Advice
At Simplicate, we recommend using the first type of direct debit: the Standard European Direct Debit:
This allows you to collect payments from private customers as well.
Your debtors have the right to reverse the payment within 8 weeks, which is standard practice in the European market.
The SEPA mandate obtained via digital signing of the quotation gives you sufficient authorization to collect payments. With the Business-to-Business Direct Debit, you would need a separate mandate from your customer for each invoice. This creates significantly more administrative work—for both you and your customer.
In addition to being administratively easier for both you and your customer, Simplicate does not support the Business-to-Business Direct Debit. The SEPA mandate sent to the accounting package is only applicable to the Standard European Direct Debit.