5 Ways to Proactively Prevent Late Member Payments
You’re familiar with members not paying on time. And even familiar with non-payments. And, like most small business owners, you’re all-too familiar with that no-good feeling — that sinking feeling you get in the pit of your stomach when you have to ask a member for payment.
The issue’s even more compounded these days with the pandemic. Times are tough. Members have lost their jobs. Families are struggling to make ends meet. So, how can you possibly ask a member for money knowing they’re going through a rough time?
Fortunately, there are ways you can proactively prevent late payments and proactively build safeguards into your invoicing process to make collecting payments effective, and keep your cash flow healthy. Here are 5 ways:
1. Review the Expiring Credit Cards Report on a monthly basis
Make it a monthly habit to run the Expiring Credit Cards Report in your member management software. If you’re using Member Manager software by Member Solutions, you’ll find this report in the Top Reports section on the Dashboard.
Run the report once a month, then proactively reach out to your members to obtain their new expiration date.
IMPORTANT! Don’t forget — Any changes to existing profiles or additions of new profiles now require the CVV2 code to comply with Visa’s new card-not-present mandate.
2. Automate recurring member payments
Automating monthly member payments through your member management software is one of the easiest and best ways to prevent late payments. Not only will auto-payments ensure consistent, predictable payments to you, members will appreciate that auto-payments are faster and more convenient for them. Members on auto-payment won’t have to keep track of their payment due date, and they’ll have one less task to handle each month.
If you’re using Member Manager software by Member Solutions, you can choose to have the software automatically process scheduled payments daily. To turn this feature on or off easily, go to Setup > Settings > Club Settings, then check or uncheck “Auto-process Scheduled Payments”.
3. Send the Automated Invoice Email one week prior to payment due date
For members not set up on auto-payment, we recommend using the Automated Invoice Email in the Member Manager software message center. You can set this email to send automatically based on the member’s payment due date. The invoice will be attached to the email at the time of sending. We recommend setting the Automated Invoice Email one week prior to the member’s payment due date to give members ample notice and help prevent late member payments.
4. Establish a clear collections process from the get-go
All studios need to have a clear collections process to ensure the financial health of their business. Make sure your member agreements include clear terms about the member’s responsibility to pay. It’s a good practice to review the payment amounts, due dates, and the membership duration with the member and have them sign off on the information, so that clear expectations are set.
In addition, at the time of signing the membership agreement, be sure to collect as much contact information as possible from each member, so that it is easy to get a hold of members should there be any payment issues. That includes the member’s mobile phone number, their email address, their workplace address, and their physical mailing address. This makes it easier to reach out through multiple channels to connect with your members.
5. When all else fails, delegate to an expert
No doubt, collecting late payments from members successfully, without damaging the relationship in the process, is a challenge. To truly be successful, appoint a dedicated staff member who is responsible for tracking late payments and recovering payments — a person who owns the task and reports on progress regularly.
If billing and invoicing in-house isn’t working, consider outsourcing your payment recovery efforts to a team of managed billing professionals to bypass the awkward asks and eliminate the complicated follow-up process altogether. By outsourcing, you also give yourself and your staff more time to focus on your business and its members, all while enjoying a healthier bottom line.
At Member Solutions, we have nearly 30 years of experience in professionally recovering payments, in-depth understanding of the payment processing business, and are better able to troubleshoot issues with failed credit card payments or delinquency. Think of us as an extension of your business. Your billing team. Your financial counselor who wants to help alleviate some the strains money puts on your member relationships.
It pays to be proactive!
A small change can often make a big difference. Put these proactive measures in place at your studio, and you’ll soon see your late member payments shrink and on-time member payments grow.
If you have any questions about the software, its features, or would like additional details about our full-service billing solution, give us a call at 888.277.4409 or book a time here with one of our Client Success Managers. We’re here and happy to help!