Direct debit (SEPA) or manual payment — which one, when?

SEPA direct debit reduces payment risk but requires a mandate. Manual payments are easier to set up but make cash flow less predictable. Here's how to weigh up the options.

Should your customer pay by manual bank transfer, or do you collect the money automatically? The choice affects both your cash flow predictability and your client relationship.

SEPA direct debit: advantages

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• You initiate payment — no risk of the customer simply not paying.
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• Payment date is predictable (cash flow benefit).
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• Fewer payment reminders needed.
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• Low to zero transaction costs (< €0.10 per collection).
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SEPA direct debit: disadvantages

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• Customer must sign a mandate (digitally or on paper).
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• Customer can reverse a collection within 8 weeks without giving a reason — the money is returned from your account.
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• Disputed claims: with a valid reason, the customer can request a reversal up to 13 months later.
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• Some banks charge set-up fees for direct debit services.
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When to use SEPA direct debit?

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• Subscriptions / recurring revenue — essentially a must.
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• Long-standing clients where there is an established trust relationship.
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• Small monthly amounts (< €200) where manual collection creates too much friction.
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When to use manual payment?

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• New clients — get a feel for their payment behaviour first.
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• One-off projects (non-recurring).
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• B2B clients who pay against a purchase order.
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• International clients (SEPA direct debit works within the SEPA zone; outside it, things get more complicated).
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A combined approach works well

Charge set-up costs manually, then handle recurring fees via SEPA. Alternatively: SEPA for the base amount, extra hours billed manually. Either way, communicate clearly what will be collected and when.

See also: invoicing guide, recurring invoices.