How to Prepare PPAP Forms

A preapproved payment plan, otherwise known as a PAPP, provides convenience to your customers as well as your billing department. By authorizing your company to transfer a specified amount of funds from a checking or savings account on a predetermined date, your customers don’t have to deal with the hassle of making periodic payments. Similarly, the arrangement frees your billing department from issuing invoices and some payment processing. Because you need written authorization to access an account held by another customer, you must secure the access to the account in writing using a PAPP form.

Collect basic customer information. Format sections on the form for customers to enter their name, company telephone number and billing address on the PAPP form. Include a field for all pieces of customer information your billing department maintains for each customer.

Collect information on the checking account from which the customer authorizes payment. Collect the home bank’s name and address, its routing number -- the first nine-digit number located in the bottom left-hand corner of a check -- and the bank account number -- the series of numbers that follow the routing number. Banks devise their own account numbering systems, so they may be of any length.

Collect a voided check from the customer to confirm the checking account information.

Provide a written statement that authorizes your company to make withdrawals from the specified account as needed. If the billing date and amount billed remain constant, leave blanks for the customer or billing agency to complete. A sample statement would read, “I hereby authorize (company name) to debit my account for $**_ on the** _ of each month. I certify that I have the authority to authorize debits from the account listed above, and agree to the terms and conditions presented by this agreement."

Provide a space for customers to sign and date the statement to authorize your account.

Include any terms and conditions you may need in a “Terms and Conditions” section. These items may include provisions that require the customer to assume responsibility for any returned or denied fees and provide notification of change of account details a week in advance of the billing date, as well as outline provisions for your company or the customer to cancel the agreement with written notice.

Warnings

  • While you should maintain the original copy of the PAPP agreement, it should be kept in a secure location in order to keep your customers' financial information safe from those without authorization to use it.

References

About the Author

Wilhelm Schnotz has worked as a freelance writer since 1998, covering arts and entertainment, culture and financial stories for a variety of consumer publications. His work has appeared in dozens of print titles, including "TV Guide" and "The Dallas Observer." Schnotz holds a Bachelor of Arts in journalism from Colorado State University.