Last editedMay 20232 min read
If you run a business which relies for its income on rental payments from tenants, then you probably don’t need to be told just how difficult collecting regular rent payments can be. With the best will in the world, tenants can forget to make rent payments or make them on a different day each month. This is not the best way to collect rent in terms of maintaining good relations with your tenants, and it can also have a detrimental effect on your cash flow. With either the date on which payments are made or the amount of those payments varying from week to week or month to month, it can be difficult if not impossible to plan ahead. In addition to this, missed, late or insufficient payments can add greatly to the amount of paperwork and admin you have to deal with. Chasing rent payments could take up valuable time and resources which would otherwise be devoted to making your business grow. The good news is that working with GoCardless makes automated rent payment quick, simple and convenient, for you and your tenants.
What is an automated rent payment?
In simple terms, an automated rent payment involves a set amount of rent – agreed between you and the tenant – going from their bank account to yours on the same day of every month, such as the 28th. The chief advantage of an automated rent payment service is that once the details have been entered into the system, neither you nor the tenant has to do anything. They don’t have to remember to make a payment, and you don’t have to ask for it or initiate taking it from their account. Many landlords opt for setting up a direct debit for rent, and working with GoCardless makes that process incredibly easy. The alternative to working with a partner is to apply for direct submitter status and work with your bank. The downsides to this include the fact that having your application processed can be a lengthy process, and many banks only offer it as an option to businesses with larger turnovers. In addition, the set-up costs and ongoing charges can be steep, and you need the expertise within your business to collect and store all the relevant payment information.
Working with GoCardless, on the other hand, means that the whole of the process is managed on your behalf. Direct Debit payments can be set up via the payment page on your website or by sending your tenant a secure payment link. Once the Direct Debit has been created, every rent payment will arrive on time, on the day you’re expecting it. This is how to automate rent payments the easy way.
Other online rent payment options
If you work with GoCardless, you can reap the many benefits of automated bank payments. Our global bank pay network can facilitate recurring bank to bank payments in a friction-free manner which has been shown to result in 97.3% of payments being collected at the first time of asking. In addition to this, the fact that GoCardless integrates seamlessly with a range of partners such as Chargebee, Salesforce and Xero means that your rent collection can be fed directly into your wider accounting, making it easy to keep track of the rent you’ve been paid, by whom, or rent that you might still be owed.
Even with the many plus points of any automated rent payment system, there will still be a few occasions when a rent payment isn’t successful, due primarily to the tenant in question not having the funds available in the relevant bank account to cover the amount of rent owed. In order to negate this problem, GoCardless are happy to offer the option of Success+ to our clients. Success+ is a service which leverages payment intelligence in order to manage payment failures. With Success+ in operation, 70% of initially failed payments are collected automatically on the day which is best for the tenant in question.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.