Nick Berry is co-owner of the Fitness Consulting Group and also a health club and PT company owner with multiple locations. As co-owner of the Fitness Consulting Group, he consults with start-ups and existing businesses alike, primarily in the areas of financing, retail, business systems and negotiations. You can read his blog at www.nickberryonline.blogspot.com and subscribe to the Fitness Riches newsletter at www.fitnessconsultinggroup.com.

As an entrepreneur I have realized the benefits of systemization and automation, and how to increase predictable results. As a business coach, I encourage clients who wish to build their business and increase their bottom lines to create systems and use automated programs whenever available. The reduction in human error, wasted time, labor, and missed sales can be astounding to realize. But when you do implement systems, you can expect increased leads, increased conversions and increased profits.

A recent trend for fitness professionals has been the movement to automated billing and third-party billing companies to collect payments from clients. Although there are still a significant number of fitness professionals who prefer the “10 sessions for $300” or pay-as-you-go method, our industry is coming to realize that the automated billing process is the simplest, most reliable and even most cost effective means of collecting recurring payments along with the stability of a receivables base.

Here’s why:

Streamlined transaction processing. You fill out an agreement, enter the data or mail it to the billing company and essentially your job with collecting the payment is finished. You will receive a wire transfer on a specified date. That’s an extremely efficient system. No more “I forgot my checkbook,” or waiting until your next appointment to get paid—it’s automatic. Now you can concentrate on providing professional service—isn’t that why you started?

Speaking of professionalism, which would you trust with your money—a legal agreement and automatic withdrawal or a verbal agreement and an appointment? While we wish the verbal agreement and appointment were secure, the fact is they just aren’t. This is your business, so run it like one.

Security. If you have automated billing for your clients, then you have a receivables base. Even if you only have month-to-month agreements automated, at least you know how much you will be drafting in the upcoming month. If you have long-term agreements, say 12 months, your receivables will be much larger and you can forecast further down the road. Fitness professionals haven’t traditionally excelled at cash management, so having automated payments will go a long way toward helping with this issue.

Less wasted money and time. By wasted money I mean money that goes to late fees or penalties. This could be for the fitness professional or the client. Automated billing will reduce the number of late payments and the time spent trying to send out notices or collect those payments.

Improved cash flow. Timely and accurate payments will help with projections, budgeting and general management of your finances.

Automated billing can actually increase your customer retention. Having the fee automatically deducted from your customer’s checking account when providing ongoing services increases the retention of those who might otherwise let the service lapse. From an ethical standpoint, this is more of a benefit to the client, given that you are providing quality ongoing service.

Financially efficient. Automated billing is free to clients. The fees for the fitness professional are typically reasonable, and should be more than offset by the savings in billing and administrative costs and hassles.

Comfort. Like it or not, clients are going to miss payments, pay late or go delinquent. This can lead to uncomfortable and unfriendly exchanges in which the client will blame you, and you will feel guilty. No one wants to be put in that position. Third-party billing companies can handle the collections process and allow you to concentrate on your business, while still collecting the money that is owed to you.

Automated billing is becoming a significant factor in day-to-day commercial transactions. Both public and private sectors have recognized that the electronic payment and receipt of funds offers significant advantages over conventional processing techniques. Health clubs have been using automated billing companies for years. More recently, other businesses have increasingly implemented automated billing programs as a means to reduce costs and paperwork—improving operating efficiency—and to better control their receivables and payables, which are necessary components of any successful business.