The easiest way to collect payments

Hopefully, you know that bank drafts are far and away the easiest way to collect payments. If you’re not, the obvious question is, why? (Editorial note: even if you’re already accepting bank drafts, please don’t stop reading now. There will be some takeaways for you in this blog post, too.)

Understanding bank drafts

If you don’t currently offer bank drafts, you might not realize just how easy it is. Your customer provides you with their bank and bank account information, which you store in your billing software. Then, a day or two before the date you have preselected for draft payments to be processed, you send an ACH (Automated Clearing House) file to the bank. Your bank then deducts the amount due from each of your customer’s bank accounts and makes one large deposit in your account. You then create payment transactions from the draft file, without any manual entry.

If your current billing software isn’t able to do this, you need to call me to help you find new billing software! This is 2023, and there is no excuse for any billing software to not offer bank drafts!

Why are bank drafts so easy?

For starters, unlike processing check payments, there’s minimal labor involved.

Secondly, the fees are much less than for credit card payments, which also require very little labor to process. In fact, if you are a savvy negotiator, you might be able to get your bank to not charge for bank draft payments when you negotiate your next banking services agreement.

Finally, most customers (note that I said most, not all!) who sign up for bank drafts are responsible. These customers ensure there is money in their bank account on the draft date, so the draft won’t bounce, meaning fewer returned checks to track down.

Getting more customers to sign up

During a sales presentation a few years ago, I had a city manager tell me he wished he had 99% of his customers on bank drafts. I naturally asked him why only 99% and not 100% and he said “because some customers just won’t cooperate”. I’m sure you don’t have any customers like that, right…?

So, how do you get 99% of your customers to sign up? Or, for starters, more customers than you have now? Let’s look at some options.

Ask every new customer

Have you ever purchased a life insurance policy? Did the agent selling the policy give you an option other than bank draft to pay the monthly premium? Probably not. Why not do the same and give each new customer a bank draft application to complete?

Waive a late fee

When customers call to complain about being charged a late fee, why not offer to waive the late fee if the customer agrees to sign up for bank drafts? This way they won’t ever be late paying their bill again.

Offer incentives

Some utilities offer financial incentives to entice customers to sign up for bank drafts. Either a one-time credit, or a smaller, monthly credit for the first year the customer is on bank drafts.

Promote bank drafts

Do you have a poster in your office letting your customers know that bank drafts are an option? Why not? You can also include flyers or a signup form in with your printed bills. Be sure the flyer also provides the option to sign up for ebilling!

Use your website

Finally, be sure you have a signup form on your website. This way you can promote bank drafts to customers who don’t frequent your office.

What has worked for you?

Have you found a creative way to get more customers to sign up for bank drafts? If so, please send me an email and share what worked for you. I’ll include the ideas in a future newsletter.

Are you processing payments efficiently?

Is your office processing payments as efficiently as possible? If you’re unsure, please give me a call at 919-673-4050 or e-mail me at to find out how a business review could help you find out.

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© 2023 Gary Sanders


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