Telpay Payment News
Bringing You Payment Insights, Trends and Best Practices

How to Manage Accounts Receivable with Pre-Authorized Debits

One thing we probably do not focus enough on here at Telpay is our ability to let our clients manage their accounts receivable through pre-authorized debits (PADs). Imagine having all your accounts receivable collected on a single day with virtually no effort. That is what PADs can do for you.

Payments Canada has a set of PAD rules and standards that all businesses have to follow. These rules protect the account holder from abuse. However, as long as requirements are met, this is a service of significant advantage to everyone.

PADs are the best option to use when collecting recurring payments such as rents, mortgages, monthly fees, and insurance premiums. However, regular monthly billings such as bookkeeping and accounting service fees, professional and club dues can also be collected by this method. You must have your customer’s permission to debit their bank accounts. PAD samples used by our clients are reviewed to make sure they meet the requirements established by Payments Canada. Getting that permission is most often built into your agreement with your customer.

With Telpay for Business electronic payment software, you can efficiently manage your collections list, import a collection file, and maintain the collection file. If you are an existing Telpay for Business customer, to get started all you need to do is apply for the PAD service. There is a setup fee and transaction fee, but no extra monthly fee, making it even more affordable to use.

Here are some tips for a successful implementation of PADs:

1. Make sure your billings are of a type that suits the requirements of Payments Canada. Only recurring types of billings are permitted.

2. Get permission from your customers to debit their bank account using the required form.

3. Notify your customers when you are ready to begin debiting them. Telpay notifies its customers that they will be debiting approximately ten (10) days in advance of actual debit. This gives your customers time to view your bill before they are debited.

4. With our PAD service, you send us a file of your monthly debits. Telpay will then debit your customers on the day specified and forward the funds to your bank account as soon as they are cleared. Typically there is a four (4) day hold.

To learn more about PADs, contact 1-800-665-0302 or visit