Health clubs are very popular in our society these days. With much public consciousness on physical fitness plus maintaining good health, many people become members of gyms and health clubs to stay fit. Others join for strength coaching, and/or to lose weight.
Together with the huge popularity of health clubs and physical fitness, also comes accounts receivable issues, because of problem payments from some club members. Neglected problematic accounts and deficient internal debt collection methods commonly spell money flow problems for the managers of these health clubs.
There's an inclination to let late receivables pile up in the hopes that delinquent members will pay willingly. Plus while managers may focus much of their attention on the gym facility and equipment, the money-managing aspects of the business, particularly having sound and consistent debt collection strategies in place tend to suffer.
Members usually sign an annual or longer contract, usually together with a price break off of a monthly pay as you go kind scenario. As is usually the case, once the initial excitement plus novelty of beginning a new regime wears off, plus the actual work of maintaining a consistent fitness schedule, a few become disillusioned.
Even though bound to a contract, a few can neglect their obligation and stop payment altogether. Several may assume that in spite of a legal contract, they shouldnt have to pay if theyre no longer using the gyms facilities.
Internal Debt Collection Techniques
Its critically significant to put into operation plus consistently follow an in house strategy for recovering on late accounts. In addition to late membership dues, other fees, like locker rentals, food services, or further charges may account for delinquent accounts.
One key part to successful debt recovery is getting as much personal data on the initial membership application. Ask for social security and drivers license numbers, in addition to banking and employment information. This info can be especially useful should these accounts have to be outsourced to a collection agency.
Early Plus Consistent Contact Is Critical
When payment is past due 30 days, a manager or someone assigned these tasks must call the delinquent member to investigate if theres a problem. Making a friendly reminder call to encourage the member to stick to their fitness plan, as well as inquiring when the late balance can be brought current may rescue a state of affairs before it gets much worse later.
Understand When To Outsource Difficult Receivables
A second phone call and/or letter ought to be sent to the delinquent club member at forty-five days. Time is of the essence, and you cannot afford to let much more time pass without communication. If the problem isnt solved, either with having brought the overdue monies current, or payment arrangements created, its time to contemplate outsourcing to a collection agency.
Statistics provide evidence that past due accounts deflate significantly with the passage of time. At forty-five days with no contact from the club member, you should know if the condition warrants different measures. The sooner these difficult accounts are turned over to a collection agency, the best likelihood for a successful recovery.
Debt recovery agencies have the wherewithal, expertise and proven techniques to collect late accounts proficiently. Cost choices include a few agencies that charge a percentage of any money recovered. Others offer the possibility of a fixed cost, flat fee, that can be very cost beneficial for many health clubs. Plus, the psychological influence of a neutral third party may make the distinction with most of unpaid accounts.
David P. Montana has three decades experience as an industry professional, commercial consultant and published writer in collection agencies services. David provides added helpful in house collection tips and information concerning health club debt collection strategies.
