NAEDO: Smart, debit orders that enhance your collection rates

July 19, 2012 · Posted in Business 

Ask not what your business can do for monthly payment collection, but what competent, low cost payment collection is able to do within your business enterprise. The single most efficient, low cost payment methods currently available is actually a NAEDO or Non-Authenticated Early Debit Order. This payment procedure combines the efficacy of debit orders together with the intelligent monitoring of credit payments to help increase your chances of successful collections and reduce fees allocated to retries and returned debits.

NAEDO debit orders were launched in conjunction with AEDO or Authenticated Early Debit Orders in South Africa in September 2006. These relatively recent payment systems were brought to increase debit order effectiveness by allowing intelligent, fair action of your debit order as close to a credit payment (e.g. salary deposit) as possible. AEDO payments are generally linked with pos transactions where a future dated debit is mandated by pin authentication, on a debit or credit card or bank account for instance. NAEDO debits don’t require pin authorization, have got a R5,000.00 per item transaction cap and tend to be only authorized to generally be submitted on accounts.

To eradicate the increasing problem of preferential payment access where some classes of beneficiaries always had use of account holder funds before others the NAEDO and its contemporaries were brought in. The introduction of new legislation allowed for the phasing out from existing preferential practices getting rid of unfair reduced collection success rates for specific beneficiary classes and establishing an equal field for all. NAEDO’s are processed in a random, non-preferential basis, providing every beneficiary or service provider with the equal and fair ability to collect payments.

The magic behind a Non-Authenticated Early Debit Order (NAEDO) is that it may be enhanced by means of tracking facilities. What this means is the beneficiary or service agency can stretch the mandated date across a specified period of time allowing the debit order instruction to be kept active, but unprocessed, until a credit payment is receive in the account. This significantly raises the creditor’s probability of collecting.

All taken into consideration, a NAEDO does not only give your company an honest potential for collecting funds, but increases your likelihood to do this by permitting tracking to induce the debit at the most opportune time. So if you are worried about your collection efficiency now may be the time to change to NAEDO.

Learn how to collect from your clients bank accounts via debit orders. Take a peak at Deb Odres website where its easy to find out all about EFT debit orders for your business.

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