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Home In Print Features

Getting Billing Right

Taylor Gabhart by Taylor Gabhart
March 31, 2020
in Features, In Print, Operations
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Getting Billing Right
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It takes a lot to run a health club successfully. And while it is important to focus on creating the best experience for your members, it is also vital to ensure you are running your billing and collections processes effectively. 

According to Motionsoft, on average the decline rate on a club’s initial billing is anywhere from 10 to 16%. So, if your club is billing $100,000 per month, you’re losing out on $10,000 to $16,000 each month. For smaller clubs that hit can be even larger. 

For Newtown Athletic Club in Newtown, Pennsylvania, a good way to stay on top of billing is to follow up with members in a timely manner. 

“One of the best practices we have found is to ensure timely follow-up after billing has been processed and payments are declined or returned,” said Brian Herman, the chief financial officer for Newtown Athletic Club. “This makes members aware of the situation immediately and helps collect more quickly.”

Another way to ensure you are running your billing and collections effectively is hiring a billing and collections partner. 

Andy Bundus, the controller at Cincinnati Sports Club in Cincinnati, Ohio, has had positive experiences working with First Data and CSI, a division of Daxko. If you are overwhelmed by the amount of software companies to choose from, Bundus said to invest in a partner that is PCI compliant, has insurance, has interchange rates/fees, and has favorable contract terms and renewals. 

Herman said when looking for a partner, make sure they align with your club. “It’s important to evaluate their process to make sure it aligns with your club strategy and matches the member experience you are looking for with collections,” he explained. “Of course, a proven track record is helpful, and ROI is a must.” 

Recently, Newtown Athletic Club moved to Motionsoft’s Back Office Support Services (BOSS) to help reduce declines and improve collections by automating the engagement dialogs through emails and calls. Herman said they are still in a transition phase, but they are excited to see the return from using BOSS. 

A common headache when it comes to billing and collections is returned electronic funds transfers (EFTs). Bundus’ tips for minimizing the overall number of returned EFTs is all about communication. “Communicate, encourage and incentivize members to pay via checking account,” he explained. 

Bundus also suggested drafting on the same day each month. This allows members to know when to expect the payment and prepare their accounts. It’s a small act that can make a big difference when it comes to EFTs.  

Newtown Athletic Club’s solution to returned EFTs is still a work in progress, but it has been helpful thus far. “One strategy we have continued to use is to require a voided check or letter from their bank to verify routing and account numbers,” said Herman. “We have found this helps eliminate returns for incorrect routing and account numbers.” 

While returns can be frustrating, overall EFTs are the way to go when it comes to billing. According to Investing Answers, the increased use of EFTs for online bill payments, purchases and pay processes is leading to a paper-free banking system, where a large number of invoices and payments take place over digital networks. EFT systems play a large role in this future with their fast, secure transactions within institutions or across banking networks.

Another way to ensure you’re maximizing your billing isn’t through software, but rather customer service. 

Herman said their club has one dedicated collections person who has experience within member services and collections. “This helps provide consistency with whom members are speaking to during the collections process,” he explained. “Having a customer service background allows for the interaction to be a positive touchpoint and works to get the member engaged in the club, if necessary. An ideal interaction would end with collecting the outstanding money and having a positive interaction.”

For Bundus, good customer service starts with educating your members. He recommends teaching them how to access their statements and transaction log. Additionally, teach them the benefits of paying via their bank account. This will make things easier for both parties. 

Billing can at times be a frustrating task, but it doesn’t have to be. Keeping these tips from Bundus in mind can allow for a hassle-free process: 

Make sure your members can easily access their bill/statement in advance, so they are aware of how much is being paid and what for.

Tracking reoccurring billing where credit memos are issued can be very beneficial.

Identify leading billing issues and come up with an action plan on how to eliminate/reduce those errors in the future. 

While billing isn’t the most glamorous topic, it is vital to ensure you are doing it correctly. Your members, employees and the overall success of your business are counting on you to make sure you get it right.    

Stay ahead in the fitness industry with exclusive updates!

Tags: April 2020billingbilling and collectionsCincinnati Sports Clubmonthly billingNewtown Athletic Clubpartnersoftware
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Taylor Gabhart

Taylor Gabhart

Taylor Gabhart is the editor of Club Solutions Magazine. She can be reached at taylor@peakemedia.com.

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