- Benefits of Direct Debit, Direct Debit, landlord, letting agent, rent, tenant
- Direct Debit
- 11, AUG 2017
Rent Payments – Direct Debit makes sense
Rent. It’s tricky to pin down exactly how much is paid in rent every year in the UK, but with more and more people finding it difficult to afford to buy, the rental market is buoyant. That’s good news if you’re a landlord – but not if you’re faced with chasing up rent payments, dealing with cheques or cash when the rent finally comes in. Direct Debit is an obvious choice for the rental sector – not only for landlords, but for tenants too.
Weighing up the Benefits of direct debit in the rental sector
For landlords and letting agents, Direct Debits can markedly improve the rent collection process.
Direct Debit is probably the most convenient way to receive payment, With the Direct Debit Instruction set up, the monthly payment will continue to arrive. You’ll be notified of non-payment – or any other problems – quickly through the Bacs reporting system.
- Cost effectiveness
Time is money. The hours saved on chasing up late payments and wading through the general administration involved in non-automated payment processes can be put to more effective use, thereby saving money.
- More control
Reliable, automatic payments make it easier to monitor cash flow and exert more control over when payment is received, reducing the problems of late payments and rent arrears. In addition, should extra charges or increases in rent be necessary, unlike other payment methods such as standing orders, the Direct Debit system allows the landlord to collect these fees (although the Direct Debit Guarantee affords the tenant some protection in the event of spurious charges).
As with other regular outgoings, setting up a direct debit for rent makes huge amounts of sense.
The payment automatically leaves their account on a set date which eliminates the worry of forgetting to send a cheque or the inconvenience of paying in person. Without having to wait for payments to clear, tenants are also able to keep track of their finances more easily.
The process is secure and the payment is covered by the protections of the Direct Debit Guarantee.
Easy to set up and just as simple to cancel, a Direct Debit dispenses with unnecessary administration, a burden in any household.
The Right Tools for the Job
As a landlord or letting agent, you may see the advantages of using direct debits, however, despite the increasing popularity of direct debits overall you find some tenants reluctant to sign up to a direct debit for rent. Bearing this in mind, if you’re intending to encourage your tenants to pay their rent by direct debit, you need to communicate a cohesive message about the benefits of using Direct Debit.
The good news is that Bacs have recently launched a free online marketing toolkit. Designed to be a useful resource in promoting and increasing take-up of the Direct Debit payment system, the toolkit enables businesses to customise and launch an effective marketing campaign. With the marketing tools and guidance provided in the Bacs toolkit, it’s hoped that the benefits of using Direct Debit can be promoted more effectively to tenants, leading to greater business efficiency across the rental sector.
The toolkit includes an advisory booklet The Little Bacs Guide to Promoting Direct Debit which gives helpful guidance on best practice when devising your campaign, a variety of professionally-designed templates (including posters, leaftets, web banners etc) which can be customised to produce bespoke marketing materials, and a library of useful images
Alongside the toolkit, we’ve come up with some of our own guidance to help businesses promote Direct Debit to their customers, and we’re always on hand to assist businesses with their direct debit solutions.
At Clear Direct Debit we have a wealth of experience in providing guidance to a wide variety of clients on all aspects of Direct Debit. For more information on how we can help you promote Direct Debit or for any other information on collection and services, get in touch. We can also offer direct debit consultancy, bureau services and bespoke training. If you’re a landlord or letting agency thinking of exploring direct debit solutions, or you need some training to get started, and then to keep up to date, we’d love to have a chat!