The easiest time to put a client on direct debit is before they've paid you any other way. Raise it in the fee conversation, write it into the engagement letter and capture the mandate when the letter's signed, so your first fee note confirms an arrangement instead of asking for payment. Clients who can't use direct debit get an agreed alternative at the same point.
In this article
The short version
- Onboarding is the easiest time to set up direct debit, because the client hasn't paid you any other way yet.
- Mention it in the fee conversation, write it into the engagement letter and capture the mandate at signature.
- One mandate covers fees that change, as long as the client gets advance notice of each amount and date.
- Collecting your own fees by direct debit doesn't make them client money.
- Agree an alternative such as a payment link at onboarding for clients who can't use direct debit.
Why onboarding is the time to ask
A new client arrives handing things over: identity documents for your anti-money-laundering checks, access to their ledger, an HMRC authorisation code. Bank details for a mandate land in the middle of all that and read as part of the same process. Six months in, the same request asks them to change something that's been working fine from their side, and it can sound like a change of terms.
Payment setup also tends to drift. Every other onboarding step holds something up: no signed letter, no work; no identity check, no acting for the client. An unsigned mandate holds up nothing, so it slips to the first fee note, when you've already done the work and your client has the least reason to deal with it.
The arrangement makes a difference once it's in place. In Adfin's payment data, invoices raised with a direct debit mandate already set up were paid 97% of the time, and 1.3% were still open six months later. Without a mandate, 90% were paid and 5.4% were still open after six months. Clients who agree to a mandate may be more reliable payers to begin with, so treat the gap as a direction, not proof.
The order to do it in
You can run these five steps on your next new client:
- Mention it in the fee conversation. One sentence before the engagement letter goes out is enough, for example that the fee is £150 a month, collected by direct debit on the 1st. Heard at this stage, it's simply how your practice works.
- Write it into the engagement letter: what you'll collect, when, how much notice the client gets before each collection and what happens if one fails. CIOT and ATT expect payment terms in writing anyway.
- Capture the mandate at signature. A client signing your letter is ready to do the next small thing you ask. If you use Socket or Engager.app for proposals and engagement letters, the client can sign the mandate in the same step.
- Tell the client when the first collection will be. They'll get notice before every collection, so nothing leaves their account unannounced.
- Give unsigned mandates an owner. Some clients need a day to find out who can authorise payments from the business account. Adfin chases unsigned mandates automatically and can offer another way to pay in the meantime, so the list doesn't depend on someone remembering it.
What clients ask before they sign
Most clients who'd prefer bank transfer want answers to four questions, and a short paragraph in your engagement letter can cover all of them:
- What leaves my account, and when? The amount, the day of the month and the notice they'll get.
- What if the fee changes? One mandate covers varying amounts, so a monthly retainer, a year-end balance and an ad hoc job can all be collected on it, as long as the client gets advance notice of each amount and date.
- Can you take whatever you like? They'll get advance notice of every amount and date, and the Direct Debit Guarantee entitles them to a full and immediate refund from their own bank if a payment is taken in error.
- What do I need to do afterwards? Nothing, which for most clients is the appeal.
Some clients will still ask to pay by bank transfer, and agreeing to that for one or two of them is fine. The trouble starts when transfer becomes the default for everyone, because the timing of every fee then sits with the client and someone has to chase the ones that slip.
If you're wondering about the client money rules, collecting your own fees by direct debit into your business account generally falls outside them. ICAEW's Clients' Money Regulations don't treat fees paid in advance for agreed professional work as client money, provided they're clearly identifiable as fees, and ICAS and the CIOT and ATT guidelines take the same line.
Clients who can't or won't use direct debit
A few clients genuinely can't: a business account that doesn't accept direct debits, an overseas bank, or signatory rules that make a mandate awkward. Agree the alternative once, at onboarding, in the same conversation. A client on a payment link with a fixed date and reminders you've set up still has an arrangement. It's the clients with nothing agreed who end up being chased.
With Adfin, one payment page takes card, Apple Pay, Google Pay, pay by bank and bank transfer, links go out by email, SMS or WhatsApp, and if a fee isn't paid, AI Customer Agents follow up within rules you set. Direct debit costs 1% + 20p per successful payment, with the percentage capped at £4 (direct debits over £2,000 carry an extra 0.3% on amounts above £2,000), so collecting a £150 monthly fee costs £1.70, and you don't need your own Service User Number to start.
Common questions
When should a practice ask a new client for a direct debit mandate? In the fee conversation, then again in the engagement letter, with the mandate signed at the same time as the letter. That way it's agreed before any work starts.
Does collecting fees by direct debit make them client money? Not usually. Fees paid in advance for agreed professional work, clearly identifiable as fees, aren't client money under ICAEW's regulations, but check your own body's current rules.
Can one mandate cover a fee that changes? Yes. A direct debit can collect different amounts under the same mandate, provided the client gets advance notice of each amount and date.
What does the Direct Debit Guarantee cover? If a payment is taken in error, the payer is entitled to a full and immediate refund from their own bank. It's offered by every bank and building society that accepts direct debits.
Do I need my own Service User Number to collect fees by direct debit? Not with a provider that collects under its own, as Adfin does. Your clients see Adfin's name on their statement unless you choose to show your own business name.
Do existing clients have to sign a new mandate? Clients moving from bank transfer do. Clients already paying you by direct debit through another provider don't need to re-sign if you have 10 or more mandates, because they move across through the Bacs bulk change process.
Sources
- The Direct Debit Guarantee - What the Guarantee covers (accurate as of October 2026) https://www.directdebit.co.uk/direct-debit-guarantee/
- CIOT - Professional Rules and Practice Guidelines (accurate as of October 2026) https://www.tax.org.uk/professional-rules-and-practice-guidelines
- ICAEW - Clients' Money Regulations (accurate as of October 2026) https://www.icaew.com/-/media/corporate/files/regulations/clients-money/clients-money-regulations-effective-1-january-2017.ashx
- Adfin - Next-generation direct debit (accurate as of October 2026) https://www.adfin.com/direct-debit-payments
- Adfin - Pricing (accurate as of October 2026) https://www.adfin.com/pricing
