For our Australian customers, the end of the financial year is looming (and coffee consumption is increasing!). It’s a chance to assess some of your arrears and overdue debts for storage rental, and explore which of those may be able to be written off against your taxable income – hopefully resulting in a smaller tax bill!
But what steps can self storage facilities take to minimise overdue accounts in the first place, and maximise cash flow? The way your self-storage facility handles overdue accounts and debtors is of vital importance. It’s critical to have clearly defined procedures in place for resolving overdue accounts – and to have tools in place to reduce the risk of them happening in the first place.
Read on to learn about ways to minimise your self-storage facility’s overdue accounts!
Communication is key!
If you’re having to manually keep track of all your customer payments, when they’re due, who’s up to date and who isn’t – that alone can take hours and hours out of your day, and leave you with precious little time for all the other jobs that pop up! One of the best ways to help keep your customers on track, if you’re not automatically taking their payments (we’ll cover that next!), is to make use of automated payment reminders, either via email or SMS. Typically speaking, your self-storage management software will be able to offer you this functionality.
Using these reminders, you can set up templated communications to be sent to your storers at particular intervals. You might choose to send one two days before payment is due, reminding them that their rent is due soon. If payment is not made, you might opt to send a follow-up message two days after it was due – and then again at five days, as a final reminder before you charge a late fee. You have the ability to determine at what points you’d like to communicate with your storer, based on your business needs.
One of the wonderful things about these automated payment reminders is that depending on the software you’re using to manage your self-storage facility, you may also be able to incorporate links to fully personalised payment portals – offering your customers a frictionless way to pay, so they can self-serve at a time that suits them.
For example, if you’re a Storman Cloud customer, you might opt to send your storer a text like the one below when they’re two days late – giving them a quick, seamless way to see and pay what they owe you! You can learn more about the features and benefits of Storman’s payment services by clicking here, if you’re interested.
An automated series of SMS reminders is not only less hassle and admin work for you and your team, but it’s increasingly preferred by customers, too. Financier Worldwide’s survey of UK consumers in 2018 found that 42% of participants wanted to receive payment reminders by text message, with emailing coming in second at 23% – with phone calls and letters trailing far behind. Additionally, over 30% nominated websites and personalised payment portals as their preferred method of making payments.
So not only is your software doing more of your work for you, but you’re offering your customers a smooth and simple way for them to pay (like we talked about earlier) that requires minimal ‘effort’ on their part. Everyone wins!
Make it simple, seamless and ‘set and forget’ for your customers to pay.
The easier you can make it for your customer to pay, the less room you’re allowing for issues and delinquency. As is the case with many things, prevention is often better than a cure! One of the key ways to help make it simple for your storers is by automating your payments.
For example, you might use your self-storage management software to automatically debit rental fees, either via a credit card or bank account – removing the need for your storer to remember to manually pay their bill. If you’re making use of payment scheduling and automation in this way, they simply need to nominate a preferred card or bank account when they first sign up to store with you – and voila, that payment method will be charged at your nominated frequency until they move out!
This ‘set-and-forget’ style of taking payment has an added bonus for your facility – the more storers you have paying their bills automatically in this way, the less you will need to deal with walk-in cash payments which can take valuable time out of your day. That means less time worrying about having the correct change, less time worrying about catching them during office hours to take payment, less administrative work entering their payment into your management software – and most importantly, less time chasing debt, giving you more time to chase sales. What’s not to love?!
For Storman Cloud customers, all these payments – and even manual credit card or BPAY payments (if you’re an Australian customer) – will automatically be added to Storman and reconciled with no action required by you!
Know when – and how – to let it go.
Of course, as helpful as effective communication and simple payment procedures are for minimising your delinquent accounts – sometimes the matter just can’t be resolved. As frustrating as this can be for your business, it’s important to have empathy and to remain professional in all your dealings with the overdue storer – as how you handle issues such as this can reflect on your business.
If you’ve exhausted your options for collecting what you’re owed, and followed best practice as defined by the industry’s governing body (the Self Storage Association of Australasia), then you may choose to exercise your right to auction goods. Before you go down this path, it’s important you’re aware of the correct process and any legal requirements: following the correct procedure will protect you and your business in the event of any legal disputes, and give your overdue storer every possible chance to remedy their account. If you’re a member of the Self Storage Association of Australia, you’ll be able to access plenty of resources that can assist you in the auction process – from templates for customer communications to checklists to legal support, and plenty in between!
Once you’re satisfied you’ve taken the required steps, and you’re confident you’re ready to reclaim what you can through an auction – we recommend checking out the online platform ibidonstorage.com.au. Winner of a 2018 Self Storage Industry Award for Excellence (innovation – business initiative and sustainability), this platform specialises in storage unit auctions, and opens up a much larger market of potential buyers. They have hosted over 18,000 Auctions and have over 1200 storage locations across Australia using their services. Once you’ve uploaded good quality photos and set your auction parameters, online buyers can then bid against each other for the goods – with no input or admin required from you! Once the auction has closed, you’ll receive the buyer details and final amount receivable by you. It’s a great way to easily try and recoup your lost storage fees, without creating extra work for you.
We understand that overdue accounts and customer collections can be one of the toughest and most stressful parts of your day-to-day work. Hopefully throughout this blog you’ve picked up a few ideas on steps you can take to minimise the risk of them happening – and some tips on ways to resolve them when they do!
If you’re interested in how Storman’s self-storage management software can help you minimise your overdue accounts and maximise your cash flow with features like reminder text messages and personalised payment portals, we’d love to show you around! Just fill out the form below to book an online demo, and our team will be in touch.