The problem
Storage customers pay monthly by bank transfer or standing order, and some forget or stop when money is tight. You chase them in between moves, and now and then someone disappears owing three months. With 40 storage customers at $160£120€143A$230C$226 a month, chasing 6 late payers at 20 minutes each is 2 hours a month, and one customer a quarter leaving owing $479£360€428A$691C$677 is $160£120€143A$230C$226 a month written off.
What the AI does
GoCardless collects one-off or recurring payments from customers' bank accounts by Direct Debit. Each storage customer sets up a mandate online once, and the monthly fee is then collected automatically. You chase only the payments that fail instead of checking the bank statement line by line. GoCardless says it syncs with accounting software such as Xero.
A worked example
A removals and storage firm in Reading has 40 containers let to customers at $160£120€143A$230C$226 a month. They move every storage customer to Direct Debit with GoCardless's Standard plan and make it a condition for new storage customers.
Before
6 late payers a month chased by hand, and an unpaid customer leaving owing $479£360€428A$691C$677 about once a quarter
After
Fees collected automatically each month; only failed payments chased, about 1 a month
What it's worth
About $226£170€202A$326C$320 a month, against about $74£56€67A$108C$105 in fees. That is $67£50€60A$96C$94 of time no longer spent chasing (5 fewer late payers at 20 minutes each, about 1.7 hours at an assumed $40£30€36A$58C$56 an hour) and about $160£120€143A$230C$226 a month less written off (one $479£360€428A$691C$677 debt a quarter). The fees are 40 payments at 1% + 20p, $1.86£1.40€1.67A$2.69C$2.63 each, excluding VAT.
How to set it up
- Sign up for GoCardless's Standard plan; the pricing page shows no monthly fee, only 1% + 20p per UK payment, capped at $5£4€5A$8C$8 excluding VAT.
- Write to existing storage customers explaining the change and send each the link to set up a Direct Debit mandate.
- Set up a recurring monthly payment for each customer at their storage rate.
- Make Direct Debit a condition in your storage terms for new customers.
- Check failed payments each month and contact those customers within a few days.
What goes wrong
- Fees are per payment and exclude VAT, so check the total against your storage income before you start.
- Customers can cancel a mandate from their bank at any time. Make sure your terms say what happens to goods in storage if payments stop.
- A Direct Debit can fail when the account is empty. GoCardless's Advanced plan (1.25% + 20p) includes Success+, which the page says recovers some failed payments automatically.
- Some customers won't set up a Direct Debit. Keep a standing order option, but watch those accounts.