The ABC’s of Management Software, Part 1

ABC Financial

Billing and collections is one of the most difficult aspects of club operations. Once a member is delinquent, it can be tricky to be personable, yet effective, when striving to bring the account up-to-date.

As a result, the key is to proactively prevent delinquencies from occurring in the first place during the billing and collections process. The fewer delinquencies you have, the less headache for you and your staff. And there’s the benefit of a stronger bottom line, as well.

According to Bob Surface, the vice president of sales for ABC Financial, there are a number of common mistakes club operators make that can lead to increased delinquencies. One example is  failing to frequently update account information, such as credit or debit card expiration dates.

“Processes should be in place to proactively update credit and debit card info, based on the expiration dates you already have on file,” said Surface.

Other common mistakes that can lead to delinquencies include:

  • Failing to make multiple attempts to rectify a declined due.
  • Not identifying and contacting past-due members quickly enough. The sooner you can notify members, the better.
  • Manually inputting credit card information into the system, versus swiping it. Swipe a card when possible to ensure accurate data entry.
  • Utilizing paper agreements where information is written in by hand.

Thankfully, your club management software (CMS) can be extremely effective in helping to drive down delinquencies.

According to Surface, a great CMS automates the collection process and creates uniform touchpoints that begin as soon as a member is past due, through multiple methods such as text, email and phone notifications.

In addition, Surface explained your CMS should give the member convenient options to satisfy the past-due balance, such as at the club, by phone, via an app or on the club’s website.

A good CMS should also:

  • Automatically make multiple attempts to rectify a past-due account.
  • Automatically attempt a secondary payment option if the primary option declines.
  • Alert front desk staff to a member’s standing at check-in.   

Unfortunately, even utilizing these strategies, some delinquiences will occur. If and when that happens, what are best practices for approaching a member about a delinquent account?

According to Surfaces, it’s important to be empathetic. “Most members naturally do not want to have a decline, or are unaware a decline happened,” said Surface. “Be flexible. Have a strategy in place to waive fees and adjust dates so it makes the client feel like you are working in their best interest.”

For example, you could waive the late fee if the client provides a secondary billing method. “Simply explain you want to lower their risk of incurring a late fee in the future,” added Surface. “Or, you could offer an adjustment to the billing date to make it more convenient for your customer, based on their pay dates. You may also express a willingness to allow members to pay off the balance in increments.”

In summary, here are three effective ways to drive down delinquencies:

  1. Create a process for regularly updating member account information, specifically debit and credit card expiration dates.
  2. When possible, swipe a debit or credit card to enter a member’s info, versus manually typing it in.
  3. Utilize your CMS to automate as much of the billing and collections process as much as possible. Let your CMS work for you.

This article is brought to you by ABC Financial. For more information on how ABC Financial can help your business drive down delinquencies, email Bob Surface at bob.surface@abcfinancial.com, or visit http://www.abcfinancial.com/.

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