The problem
Plenty of small farms let a paddock for horses, a few storage units in an old barn or a workshop. Ten tenants paying by standing order, transfer or cash means checking the bank each month, matching payments and chasing the late ones. If matching takes 5 minutes a tenant and 3 late payers take 20 minutes each to chase, that's 50 plus 60 minutes, nearly 2 hours a month, and late rent can run 2 or 3 weeks before anyone notices.
What the AI does
GoCardless collects payments straight from customers' bank accounts by Direct Debit. Its pricing page lists Standard at 1% + 20p per UK transaction, capped at $5£4€5A$8C$8 with no setup costs and prices excluding VAT. Set up a monthly Direct Debit for each tenant at the rent in their license or tenancy agreement, and GoCardless collects it each month. You check the failed payments and contact those tenants yourself. Standard doesn't include automatic recovery of failed payments; Success+ comes with Advanced and Pro at higher fees.
A worked example
A mixed farm near Shrewsbury lets 4 horse grazing paddocks at $160£120€143A$230C$226 a month, 4 storage units at $120£90€107A$173C$169 and 2 workshop units at $466£350€417A$672C$658: 10 tenants paying by standing order, bank transfer or cash.
Before
10 rents matched at 5 minutes each and 3 late payers chased at 20 minutes: 110 minutes a month, with late rent noticed weeks later
After
Rents collected by Direct Debit, with about 20 minutes a month checking for failed payments
What it's worth
About $60£45€54A$86C$85 a month saved, against about $23£17€20A$33C$32 to $28£21€25A$40C$39 in GoCardless fees. That is 90 minutes a month (110 down to 20) at an assumed $40£30€36A$58C$56 an hour. Fees on Standard at 1% + 20p: 4 × $1.86£1.40€1.67A$2.69C$2.63 + 4 × $1.46£1.10€1.31A$2.11C$2.07 + 2 × $4.92£3.70€4.40A$7.10C$6.96 = $23.14£17.40€20.71A$33.41C$32.71 a month, or about $28£21€25A$40C$39 with VAT if you can't reclaim it. Rent arriving on the due date helps cash flow too, but isn't valued here.
How to set it up
- List each let with the tenant, the monthly rent and the payment terms in their license or tenancy agreement.
- Open a GoCardless account on Standard and check the fee against your rent amounts.
- Send each tenant a request to set up a Direct Debit, starting with one tenant as a test.
- Each month, check for failed payments and phone those tenants the same week.
- Before a rent review, give the notice the agreement requires, then change the amount in GoCardless.
What goes wrong
- Failed payments aren't recovered automatically on Standard; Advanced includes Success+ at 1.25% + 20p, capped at $7£5€6A$10C$9.
- Some tenants won't want Direct Debit. Keep another way for them to pay and match those by hand.
- Letting land and buildings has VAT and tax rules of its own, such as whether a building has been opted to tax. Ask your accountant before setting amounts.
- Direct Debit doesn't change the terms of the let. Arrears and notices still follow the agreement.