Can I pay my business energy bill by direct debit?

Direct debit is common on business accounts, but we have not found any Ofgem rule requiring suppliers to offer it, or any other particular method, to business customers. What you can use is set out in your contract and the supplier's payment terms, so confirm it before you sign.

Typical payment options

• Direct debit. The supplier collects money automatically on a set day.
• Online or bank transfer against each invoice.
• Card payment through an online account or by phone.
• Cheque or other methods, where still accepted.

Ofgem's microbusiness guidance suggests looking at payment methods as well as contract length when you compare deals. A supplier may set different terms for different methods, so ask whether the one you choose affects your rates or adds a fee.

Fixed or variable direct debits

Type	How it works	Watch for
Fixed (monthly estimate)	Same amount each month, reviewed from time to time	Credit build-up or a large catch-up if your estimate was wrong
Variable (pay what you use)	Amount follows each bill, based on readings	Uneven cash flow; needs good readings

Example: your annual energy is estimated at £6,000. A fixed debit is £6,000 ÷ 12 = £500 a month. If you actually use £5,100, you will build up about £900 of credit, which you can ask to have refunded. See how to get a credit balance refund.

Check before you agree

1. Is the debit amount fixed, and how and when will it be reviewed?
2. What is the collection date, and can you change it to match your takings?
3. What fee or action follows a failed payment? See late payment charges.
4. Does the supplier require a deposit or credit check as part of the offer? See credit checks and security deposits.

If cash flow is lumpy, a seasonal business such as a pub or seaside café can ask for a payment date after your busiest trading days, or a variable debit.

If a payment fails or you cannot pay

Contact the supplier as soon as you know. Citizens Advice advises negotiating a deal that works for both sides, and a payment plan can avoid escalation. See payment plans.

Setting it up well

• Match the collection date to your cash flow, a few days after your main takings arrive.
• Review the amount every six months or after any change in opening hours or equipment.
• Keep the notice letter about the debit amount; it is evidence if you later dispute it.
• Check your bank balance on collection dates so one failed payment doesn't trigger fees.

Multiple sites

With several premises, ask whether one debit covers all accounts or each site has its own. Separate debits make it easier to see which site costs what, while a combined one is simpler to manage. Either way, make sure each meter's readings are being sent, since a single estimated site can distort the whole payment.

Next steps

Read the wider guide to paying business energy bills and keep your account number to hand when you call.