Vital Billing Considerations Post-Shutdown
According to Craig Cote, the president of Mountainside Fitness in Arizona, this circumstance calls for an increased focus on billing to ensure accuracy — even if you have a software partner that handles this aspect of the business for you. “Because of the turn-off and turn-on nature of the past three to fourth months, there are numerous issues with membership status and billing,” he said.
Common issues include:
- Annual/enhancement fees for the months of April and May. When is the most appropriate month to bill?
- Freezes that were scheduled for 30 or 90 days pre-shutdown, but the COVID closure interrupted the calculation of those 30 or 90 days.
- The accidental billing of memberships that do still have a freeze or cancel status.
To prevent these issues and ensure as much accuracy as possible, Cote advised comparing your results pre and post-shutdown. What is the difference?
“Attempt to compare membership detail from one period to another, such as March 3rd billing versus June 3rd billing,” said Cote. “Which memberships are not included in the June 3rd billing and confirm if those accounts have freeze or cancel status, or if the membership accidentally has a status of no billing until July which was not authorized, as some billing companies pushed certain sign-up dates from the month of March to start billing in July inadvertently.”
In addition to a preview of the billing file, Cote would also recommend a heavy review of the declined/collections file. He explained these cases often fall into four key categories:
- Do Not Honor (member told their bank to stop). In this case, Mountainside Fitness asked its software to assist and run some single/manual billing.
- Expired Card.
- Generic Decline (attempt to re-run outside of the batch billing).
- Insufficient Funds (the software is best at this re-run throughout the month, said Cote).
“This categorization helped in June, as the 17.5% decline rate seemed overwhelming,” said Cote. “But we broke it down into categories which we assigned to our membership/collection team and the billing company to optimize their software.”
Although Mountainside Fitness has a billing partner, Cote said it can be beneficial to still have a person dedicated to the process on your team. In Mountainside Fitness’ case, this person is called the membership controller.
“I believe eight to 10 clubs is an optimal size to have a membership controller assigned to the daily review of recent sign-ups, assisting with collections, and most importantly the preparation/review of billing,” said Cote. “This is primarily to confirm memberships are billed, such as a query, ‘Who has checked in to childcare within the past 30 days, but was not billed childcare dues.’ Last year, we improved $300,000 in childcare dues simply by managing the usage/billing.”
Again, your club and management software have never faced these challenges before. Be sure to do your due diligence to ensure billing is accurate and no funds go uncollected.