Tips to help you take control of your books
I've been working with a personal trainer at a private gym since last August, and every 10 sessions, my trainer gently reminds me that my last session is on a certain day. And on that day, like clockwork, I hand him a check for the next 10 sessions.
At my former health club, I paid for my membership with EFT. With my new full-service club, I paid in full, before it opened, because doing so entitled me to a slight discount.
Each payment method has its pros and cons for a member but especially for the owner of a health club, who, after all, needs that monthly cash flow to keep his business afloat. These days a club owner has several options when it comes to collecting membership dues. And as more and more clubs turn to user-friendly computer software, in-house billing is becoming common. Here some industry insiders discuss the finer points of in-house billing:
* Make sure the software program you use has a reliable support system. At MetroFitness, in Montgom-ery, Ala., in-house billing is in place and by all accounts is a success. "It's not hard to do," says general manager Tom Swarts.
But in the beginning, he needed help getting the program set up and working once a week for about three months. "There wasn't a problem with the software," he says. "It was problems on my end. I needed help going over things I wasn't clear on."
Once the software system was in place, the hardest part was sending a test disk to the bank to see if the in-house software was compatible with the bank's system. Working this out can take time, Swarts says, but "I was lucky it worked the first time."
And once it gets working, in-house billing can save time. Because Mel-anie Gray, business manager of the Edge Fitness Center, in Peoria, Ill., has been using software for some years, she can now do her club's monthly billing in "three hours total."
* Make sure whomever handles your billing is comfortable with the software. "You have to know a little bit of accounting to do the billing, but basically you need to know your software and what it can do," says Gray.
Adds Rick Caro, chairman of Spectrum Clubs Inc., an in-house billing system should essentially require junior clerks who know how to enter figures into a computer and how to read a screen so if someone says, "I didn't sign for something on February 11," the staff person can say, "Oh yes, it was your son who signed for an ice cream cone."
Overseeing the whole accounting area has to be someone with bookkeeping training, says Caro. At the Edge, for instance, an actual accountant takes care of the club payroll.
* Be ready to swallow your pride and admit to the member that you have made an error. Swarts says that thus far any problems he has encountered have been his own doing-primarily inputting an incorrect digit. "I'll leave a check-in message at the front desk and the person there will tell the member it was our mistake and ask for a check to cover their payment for the month," says Swarts.
"People haven't had a problem writing a check to cover the amount," Swarts offers. And, he adds, "we haven't had anyone default on their account. Maybe in the future when we get four or five times bigger we may have to outsource, but for now in-house billing is not hard to do."
* Recognize that in-house billing may mean you become privy to personal matters. This can actually be a good thing. "The club owner and I like the personal touch," says Gray. "A member has someone he or she can talk to at the club."
According to Gray, it helps to have someone who knows the members work with them when a financial crisis arises. Issues she has handled run the gamut of freezing a membership when a medical problem arises, helping someone who is going through a divorce to pay by check until his bank account is cleared up, and changing an account for a senior member who goes to Florida for the winter.
* Encourage members to use credit cards for their billing. "I wish everyone would use credit cards," says Gray. "Right up front you know who's who. The majority are always ap-proved." In fact, she adds, five times as many people default with their checking accounts than with their credit card accounts.
* Don't be shy about letting a member know if there's a problem with his account. "Our owner likes us to know that we have complete access to our members," says Gray. "If John Doe doesn't pay for two months, I know I can go up to him and say, 'There's a problem. We need to take care of it.'"
* Have a system in place for collecting your money. "We allow our members to get three months behind before we start going after them," says Gray. "This has seemed to work for us. It gives a person a chance to catch up."
Gray makes contact with the member by phone or letter to find out what has happened. If after 30 days a member doesn't respond to Gray, she turns the matter over to a collection agency.
* Set up an accounts-receivable system. "No matter how good a billing system you have, you need a system whereby you can send out notices every 60 or 90 days," says Caro. "The system shouldn't be dependent on your making calls but automatic, so there's a system to remind people and get money from them and alert the front desk so they can stop them at the desk."
The computer system should be set up to freeze their memberships. "There should be a system for talking with the manager that's firm but polite so that people don't have a chance to run around the club and take advantage of services without paying for them," says Caro.
* Be ready to take legal action, if need be. Gray points out that often members don't realize their contract is for a year. "Young people don't realize that even if they quit coming, they'll still be charged," she says.