5 Reasons Why Local Authorities Need A Direct Debit Management System
5 Reasons Why Local Authorities Need A Direct Debit Management System
We recently conducted a research campaign of UK local authorities to find out what problems they were experiencing in finance departments, specifically relating to payment collections by Direct Debits. We found that many local authorities were experiencing similar problems, due to a number of reasons but mainly budget cuts and cost efficiency pressures. We also found that many of these problems could easily be resolved – quickly and cost-efficiently – by implementing a Direct Debit Management System (DDMS), such as Fundtech’s Bacsactive-IP with Direct Debit Manager Module.
So, here are our 5 top problems faced by local authorities today, and how they can be solved with a DDMS.
1) Budget Cuts & Efficiency Drives
The Problem:
Local authorities across the UK are being hit with tough savings targets and are looking at ways to reduce spend in all departments, especially back-office costs.
The Solution:
Collecting Direct Debits can be complex and have a manual processing overhead if not carried out with automation and compliance with the scheme rules. Many organisations have grown their Direct Debits collections organically over many years and as such the manual activities have grown in tandem resulting in unnecessary manpower to handle resulting exceptions. Many local authorities have found themselves in a position that they want to grow their payer base on Direct Debits rather than more costly payment methods, but cannot justify the growth in labour to handle the resulting exceptions generated by a manual system. This is where an effective DDMS can provide the local authority with the scalability that automation provides without the need to increase manual labour. Before a DDMS is implemented, a Direct Debit expert will first look at how payments are collected currently and then and recommend an alternative process that is quicker and more cost effective. Implementation of a DDMS is expedient and the low set-up costs of a system that is Software as a Service (SaaS) will provide a quick return on investment. Local authorities are then in a position to promote Direct Debits amongst their customer base, which will ensure that their payments are collected automatically, and on time.
2) Amalgamation of Different Councils
The Problem:
We found that many local authorities across the country were experiencing problems due to recent mergers with other organisations in their region. In one example a council had been amalgamated with 7 other councils. Obviously this had caused quite a few headaches as each individual council had their own systems and processes, inevitably not always compatible with one another.
The Solution:
A key feature of a DDMS is that it can be easily tailored to suit any particular situation and requirements. It provides a high level of control, visibility and reporting, whilst at the same time automating most tasks and keeping administration expenses to a minimum.
- A DDMS can handle multiple Service User Numbers (SUN) and limit business unit access.
- Client Portals can be used to offer Call Centre and administrative staff limited access where required.
- An API into DDMS can help with integration on multiple systems.
- A Paperless Direct Debit (PPD) sign-up module can help reduce manual activity by extending sign-up directly to the customer.
- The flexibility of Software as a Service (SaaS) and a DDMS solution with multiple configurations and deployment can help consolidate systems without it needing to be a big bang approach.
3) Introduction of New Schemes
The Problem:
Some local authorities have set up new services, such as a leisure card for example, and were therefore collecting Direct Debits from a new customer base. This often proved to be a headache as staff were not properly trained to setup and process the collections efficiently, which caused problems.
The Solution:
A DDMS is a flexible solution that can easily be set-up to segment payers into business units, each with their own configuration. All payers are segmented for reporting purposes, but at the same time can exist on a single SUN if required. There are also a number of Bacs approved Direct Debit Training courses that can help alleviate problems due to incorrect set-up and management of a Direct Debit service.
4) Moving from AUDDIS to Paperless (or Non-AUDDIS to AUDDIS)
The Problem:
Many local authorities are already making the change from paper to electronic, however the switch from Non-AUDDIS to AUDDIS can result in many problems, often because they would only move one function over at a time rather than the whole local authorities.
The Solution:
Using a DDMS can make the switch from AUDDIS to Paperless Direct Debits hassle free, and DDMS installers can help with converting non-AUDDIS to AUDDIS. A DDMS can easily facilitate a council-wide switch but allow each business unit to be autonomous if necessary.
5) New Partnership Schemes
The Problem:
We came across many scenarios of local authorities who were entering scheme partnerships with other public sector organisations. As a result they had at least two separate systems to process collections, which was proving to be inefficient and expensive.
The Solution:
This issue is similar to (2) where multiple departments and systems are being brought together, usually with complex results. Implementing a DDMS can easily resolve this issue by bringing together data from multiple disparate systems, so that they can be managed more efficiently. The benefits of having a SaaS DDMS system are also relevant here as it can delivered on-demand with very little set-up costs - there is no need to buy or install software or set-up your own server-system. All admin screens can be accessed via Internet Explorer.
More about Bacsactive-IP Direct Debit Manager Module
Direct Debit Manager is the most advanced Direct Debit management solution available today and the only fully automated solution in the Bacs market. It enables you to manage all aspects of your Direct Debit process reducing the risk to business and releasing staff to focus on more productive activities. The system provides a high level of control, visibility and reporting whilst automating most tasks and keeping administration expenses to a minimum. Visit the website.