The selection of a company to partner and work with for software and billing is one of the biggest decisions you make as a club owner or manager. When making the decision, consider some of the following factors:
• Get a total solutions provider (billing, software, support).
• Make sure they can do collections on delinquent accounts.
• Make sure they also provide technical assistance on hardware.
And, ask some key questions:
• How long have they been in business?
• What’s the size of their operation?
• What does their technical support team look like?
• What is the total lower cost? (processing, returns, merchant fees, software, cancellation or exit fees, collections, other miscellaneous items, if any)
• What’s the typical wait time for a call back?
• Do I get voice mail or a real human being when I call?
Next, look for choices. You have the option of doing all your own data input or having the billing company do it. For clubs that are buried in paperwork, or that can’t justify having a qualified data entry clerk, outsourcing the work may be the answer. Perhaps the general manager is on-site and involved, capable of overseeing that end of the operation, then by all means keep it in house. You’ll have all the one-on-one member interactions and can make changes and updates quickly and efficiently.
Often the difference between the two options is payroll and staff capabilities. Make sure that you can switch between options without ever having to change software. Whatever the decision, it should all be with one company.
Other points to consider when making this key decision are:
• Who will do back- ups of our data?
• What happens when the Internet goes down? Are we down?
• Is assistance available when adding a computer or hardware issues arise?
Talk through the actual EFT billing procedure. “If my members get billed on the first of the month, when do I get paid?” You should also get paid on the first of the month. Be leery if there’s any lag time; your money shouldn’t be out there earning interest for someone else. A strong dues line is the key to success in the club business. Why? Because monthly dues members yield up to 30 percent greater average lifetime economic value than paid-in-fulls, and with no greater effort on your part. Plus, a strong dues line makes your cash flow more reliable and your club more valuable in the resale market.
Avoid local banks for EFT billing. (Typically they do not offer credit card billing). With bank software you are forced to do double entry for all new members, changes, freezes, and cancellations. Ideally, one software is all you need to process all types of billing. When taking credit cards, realize the decline rate is higher on “debit/credit” cards. Whenever possible on debit card users, get their checking account information. Not only are the approval rates higher, but you avoid the merchant/bank fees. Credit card costs are also higher. You typically will pay half to three-quarters of a percent higher for these “card not present” transactions compared to your over-the-counter “card present” transactions along with a per transaction fee.
Even the best-managed clubs have four to seven percent of their billed items return uncollected each month. Action should happen quickly. (i.e. first delinquent letter should go out within 24-48 hours). Members who are dealt with promptly and properly will typically respond positively and also provide the new billing information. To protect both yourself and your billing company, make sure they are licensed and bonded as a collection agency to do follow-up on delinquent accounts. Your membership agreement needs to clearly state the processing company and whether a service charge will be assessed. This is required in most states before opening for business and it will make you less vulnerable to any lawsuits.
Look for true support when you are billing. Are you provided with a problem report after creating your billing file that points out missing account numbers, missing dollar amounts, “bad accounts” from last month – meaning those members who were delinquent and still have not responded with new information? Insure assistance is provided with reading statements, uploading and downloading information, etc. Request a designated person who deals with your account the majority of time. This is an important relationship to build and trust.
Lastly, re-evaluate your billing company, its procedures, fees, and practices at least once every three years. Look for any price or policy changes, workability, upgrade fees, and ease of use. Make sure marketable improvements have been made and are available to you. These should be provided at little or no expense to you. A true billing partner will be proactive on the efficiencies the industry has to offer.
Carole Oat is the National Sales Manager of Twin Oaks Software. She can be contacted at 860.829.6000, or by email atcoat@tosd.com, or visit www.tosd.com.
