In a previous post we talked about how to set your rental price. Now we need to figure out how to actually get paid. Thankfully the growth of small niche and at home businesses has created a number of easy to use tools and options that are perfect for property managers. Of course all the traditional options are still available but you will need to make some decisions as to what will work best for you and your customers. Also bear in mind that some options represent financial exposure for your and your business as well as additional operating expenses.
In general there are three basic methods of payment that work best for a cottage property manager:
- Credit card payment is in most cases the easiest for both you and your guests.
- Payment by cheque is the most traditional and is preferred by many people.
- Payment in cash while not as common still needs to be considered.
The choice is yours as to whether you want to offer all of these payment options or just one or two. It is important to make sure you are considering not only what works best for you but also what works for your customers.
To use credit card payment you have two primary options. You can either have your business set up as a merchant through your bank, or make use of one of the online credit card processing services. If you make use of your banks credit card services they will provide you with a credit card machine which will allow you to directly process credit card payments in person, over the phone, or even on your website. Should you decide to use an online service, your customers will need to make their payments to you using a link from your web page. With this option you are not able to take credit card payments in person or over the phone. The advantage, of course, is that the fees for these online services are significantly less that the options available from a bank –but you will need to balance the savings against the reduced payment flexibility.
Payment by cheque is preferred by many customers who may not be comfortable providing their credit card number. This is typically not an issue with repeat customers, but for those who may by first time guests you will need to understand their hesitation in providing a credit card, and offer them the ability to pay by cheque. This does make the deposit process somewhat longer, but if you hold the reservation for a limited number of days to allow time to receive a cheque it shouldn’t be an issue. You will also want to ensure that you receive the balance immediately upon arrivalto allow time for the cheque to clear. It may be advisable to have the cheque certified to ensure that payment is received prior to your guests completing their stay. With the exception of having possibly needing to certify a cheque this method is the least costly to you and will help reduce your operating expenses.
It is inevitable that some of your guests will want to pay cash. As a result you will need to be prepared if you are willing to accept cash payments. There is of course no way for you to receive a cash deposit unless your guests are able to physically deliver the payment to you. Typically you will only need to be concerned about those guests who prefer to pay the balance of their rental fees in cash, after paying the deposit by credit card or cheque. To accommodate this you will need to ensure that you can professionally receipt payments and provide change if necessary.
The choice of which, or how many, of the payment options you use should reflect the needs and expectations of your customers. After having attracted prospective guests to your property, or having earned their loyalty for a return visit, you want to make the financial transaction easy and trouble free. You can expect some expense to be associated with accepting payments but it is essential to monitor and minimize these costs where possible. How you handle the transaction is a very strong reflection of the professionalism of your business.