The end of every month is a hectic time for all business owners; from paying bills and settling salaries to making new payments, they are loaded with monetary tasks.
Since all these tasks are extremely crucial for a business, it can be quite overwhelming for one person to perform these activities without making any errors.
If you are a business owner who faces the same problems, GIRO transactions are precisely what you need.
GIRO transactions have forever changed the landscape of recurring payments. But as a responsible business owner, you must be wondering how it can help your business. Let us find out.
What is a GIRO transaction?
Before diving into the benefits of GIRO, let us first understand what it is.
GIRO stands for General Interbank Recurring Order. With the help of GIRO, you can pay or collect funds directly from your bank account. It works great for countries like Singapore, where electronic banking systems are a big hit.
With GIRO, you can set up regular and regular for your customers, clients, and other businesses.
It saves you from the hassle of making manual recurring payments.
GIRO offers two primary services for businesses and individuals:
- GIRO direct debit: This feature allows the billing organization to withdraw funds directly from your bank for recurring payments.
- GIRO-on-demand: If you are not sure about the direct debit feature, the GIRO-on-demand facility will allow you to approve each transaction manually.
How does a GIRO transaction work?
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Authorization
As the business owner, you begin the process by setting up a recurring payment schedule. Here, you focus on things like the amount to be debited, the recipient’s account information, and frequency. Once that is done, you authorize a financial institution to debit a specified amount of money from your account at regular intervals.
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Initiation
After providing the set of instructions, the bank reviews some factors, like your available balance and credit limit.
Once that is done, the bank forwards it to the Automated Clearing House (ACH).
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Settlement Calculation
ACH then determines the exact settlement amount for every individual bank involved in the transaction.
The final figures are shared with the MAS Electronic Payment System (MEPS), which handles the funds.
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Processing
The financial institution processes the payment instructions and initiates the fund transfer on the scheduled dates. This can include salary payments, utility bill payments, loan repayments, and other recurring transactions.
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Settlement
The funds are electronically transferred from the payer’s account to the payee’s account through the interbank network.
What Are the Benefits of a GIRO Transfer?
Here is why GIRO is ideal for businesses to make recurring payments, especially in countries like Singapore:
- Eliminates the hassle of making multiple manual payments each month. Also helps to save time and simplifies administrative tasks and manual responsibilities, leading to increased overall efficiency.
- You no longer have to stress about remembering factors like due dates, payment amounts, and more.
- You no longer have to deal with cheques.
- Eliminates the possibility of human error while paying bills and making payments. This can be quite beneficial for your business.
A Few Useful Tips:
- Before signing up for GIRO, take time to carefully read all the given terms and conditions. Proceed only if you are comfortable with the process.
- Keep checking your bank statements regularly to track how and where the payments are made.
- Always ensure that you have enough funds in your main account for a deduction to be made on the billing dates. Keeping track of each deduction will help you with this.
- Review GIRO arrangements periodically and terminate the payments that are no longer required.
Conclusion: The Bottom Line
Running a business is hard, especially during the end of each month when you are loaded with responsibilities. With the arrival of GIRO, you no longer have to worry about cashing cheques to all your employees, dealers, and billers.GIRO will make automatic recurring payments to all the parties. At the same time, you can sit back and focus on other important aspects of growing your business.Remember to always keep track of the transactions made through GIRO so you can ensure that there are enough funds in your account to pay the bills.
