What Are The Steps To Submit A GIRO Credit Authorisation?

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GIRO marked an end to an era of routinely issuing and depositing damage-prone cheques when that was the only way for businesses to conduct high-volume transactions. This simplicity enabled GIRO to earn the status of being amongst the most convenient interbank fund transfer methods for businesses in Singapore. But it wasn’t just the convenience that GIRO brought; security came along, too. An authorisation process is required to ensure that all GIRO transactions are legitimately conducted. One of which is credit authorisation.

What is GIRO Credit Authorisation?

Credit authorisation certifies that a payee has agreed to receive payments from the payer. It is usually only required once when submitting or updating a GIRO application.

Not all organisations require this process to be carried out. But if your client requires it, here’s how you can carry out the process:

  1. Collect the form.

Each organisation liable to pay you will likely be able to provide you with a credit authorisation form. This form is usually issued by the company and can have different names, such as DCA, FormSG, etc. Acquiring this form is the first step. If it’s not already available on a company’s website, please contact their team directly and request that the form be emailed, faxed, or sent by post.

  1. Obtain your bank’s endorsement, if applicable.

Depending on the type of your organisation and the bank account you’ll be using to receive payments, you may be required to fill out a GIRO credit authorisation and declaration form. Currently, this form will not be required for initiating GIRO payments unless,

  • Your company is an institute of public associations.
  • Your bank account is a joint account.
  • Your bank account is not held with either of the four banks exempt from this requirement.
  1. Fill in the details.

Typically, the completion of the authorisation form would necessitate the efforts of both your company and your bank. The first portion of most forms is what you would have to fill in by entering basic details like the UEN, name and type of company, the bank associated with the business account, and so on. It usually concludes with the signature of your business representative.

The second part of this form is the bank’s endorsement or declaration, which includes your bank’s stamp and signature.

Typically, you’ll first have to complete your portion before sending it to your bank for their stamp. Always contact your bank to understand how exactly this process is carried out. Some may want you to personally talk to their representative or directly accept requests through the banking portal.

  1. Submit the form.

After the form is complete and accompanied by the bank’s endorsement, it’s supposed to be returned to the billing organisation, which is the company that’s supposed to pay your business. Presently, most organisations accept a soft copy of this form via email or their portal. Conversely, some may only accept hard copies. Thus, it’s important to time your submission so that it doesn’t exceed the deadline.

  1. Wait for acknowledgement.

Most businesses assume that they’re done with the process once the form has been returned. However, this isn’t over yet. Lastly, you should wait for your billing organisation to send a confirmation acknowledging that they’ve received and accepted your application. Failure to keep this in mind may later leave you scratching your head when payment doesn’t come through on time.

Consideration:

Some government entities may not credit payments to a third-party virtual bank account despite providing an endorsement from the bank. If your bank account is held with a bank account that is not supported for payment by an organisation, it’ll be your responsibility to arrange for an alternative. Usually, the most obvious step would be to open a new business account with a bank that the billing organisation accepts.

The Bottom Line:

Although credit authorisation is a one-off procedure, it doesn’t become synonymous with being an optional step. Always check with your bank and billing organisation ahead of time to get accustomed to the process. This would prevent you from missing the deadline set by the billing organisation. Maintain open communication with everyone involved so that confusion doesn’t add friction to the completion of this form.

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