How AI can aid your Self-Storage Collections. Joshua Webb, Head of Growth at Kinnovis, explains.
Late payments remain one of the most persistent challenges operators face, disrupting financial planning and creating administrative burdens.
While late fees provide a necessary mechanism to encourage timely payments, many operators struggle with implementing them effectively. This is where artificial intelligence (AI) is creating new opportunities for efficiency, compliance and improved customer relations.
Self-storage operators in the UK face a delicate balancing act when applying late fees. On one hand, consistent enforcement is essential to protect revenue and discourage payment delays. On the other hand, operators must navigate complex regulations including the Consumer Rights Act 2015, the Unfair Contract Terms Directive and most recently, the Digital Markets, Competition and Consumers Act 2024.
According to industry guidance from the Self Storage Association UK (SSA UK), late fees should be transparent, proportionate to actual administrative costs and applied consistently. Yet many operators report difficulties in meeting these standards, particularly when relying on manual processes.
AI-powered management systems are revolutionising how self-storage operators handle late fees. These platforms offer several distinct advantages over traditional manual approaches.
Modern management software allows operators to establish customised rules for late fee application. They also allow you to monitor all accounts continuously, flagging missed payments and applying fees according to predefined parameters. Parameters can include grace periods, minimum thresholds to avoid charging fees on negligible amounts and graduated fee structures that escalate based on the duration of the delay. The system applies these rules automatically, freeing staff from time-consuming manual reviews.
Large Language Models (LLMs) like ChatGPT offer valuable assistance with the challenging aspects of charging late fees to customers. These tools can generate e-mail templates that strike the right balance between firmness and fairness, using language that clearly explains the situation without alienating valued customers. LLMs can also analyse successful communication patterns and suggest wording that maintains professionalism while encouraging prompt payment. They can also help craft messages appropriate for different stages of lateness, from gentle reminders to more serious notices, ensuring your approach remains proportionate to the situation.
Beyond communication, LLMs can provide recommendations for designing late payment fee structures that protect your business interests without damaging customer relationships. They can suggest graduated approaches based on industry best practices and regulatory requirements specific to the UK market. Additionally, these AI tools can help draft comprehensive payment policies for your website that clearly outline expectations, procedures and consequences in plain language. This transparency helps customers understand their obligations from the outset and reduces disputes when late fees become necessary. With proper human oversight, LLMs serve as powerful assistants in creating a late fee strategy that balances business needs with customer satisfaction.
Despite these technological advances, human oversight remains essential ...
Click here for a free AI template you can use to create your own Late Fee Policy and pricing structure.