Health clubs are very popular in our society these days. With much public awareness on physical fitness and maintaining good health, many people become members of gyms and health clubs to keep fit. Others join for strength coaching, and/or to lose weight.
Together with the huge popularity of health clubs plus physical fitness, also comes accounts receivable issues, due to delinquent payments from a few club members. Neglected problematic accounts and poor in-house debt collection techniques commonly spell money flow issues for the managers of these health clubs.
There's an inclination to let late accounts pile up in the hopes that past due members will pay willingly. Plus while managers may focus much of their attention on the gym facility plus equipment, the money-managing aspects of the facility, particularly having sound plus consistent debt collection strategies in place tend to suffer.
Members sometimes sign an annual or longer contract, typically along with a price break off of a monthly pay as you go sort scenario. As is commonly the case, after the initial excitement and novelty of beginning a new regime wears off, and the real work of maintaining a consistent fitness schedule, some become disillusioned.
Even though bound to a contract, several can neglect their obligation and stop payment altogether. A few can suppose that in spite of a legal contract, they shouldnt need to pay if theyre not using the gyms facilities.
In-house Debt Collection Techniques
Its critically significant to implement and consistently follow an in house strategy for recovering on past due accounts. In addition to late membership dues, other fees, such as locker rentals, food services, or additional charges can account for non-paying accounts.
1 key element to successful debt recovery is obtaining as much personal data on the initial membership application. Ask for social security plus drivers license numbers, as well as banking and employment information. This information will be particularly helpful should these accounts have to be outsourced to a collection agency.
Early Plus Consistent Contact Is Critical
Once payment is past due 30 days, a manager or someone assigned these tasks must call the delinquent member to see 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 situation before it gets far worse later.
Recognize When To Outsource Tough Debts
A second phone call and/or letter should be sent to the past due club member at forty-five days. Time is of the essence, and you cannot afford to let much more time pass with no communication. If the problem isnt solved, either with having brought the overdue monies current, or payment provisions created, its time to take into account outsourcing to a collection agency.
Statistics bear out that overdue accounts depreciate significantly with the passage of time. At forty-five days without contact from the club member, you should know if the condition warrants different measures. The sooner these problem accounts are turned over to a collection agency, the better likelihood for a successful recovery.
Collection agencies have the wherewithal, expertise plus proven techniques to collect past due accounts efficiently. Cost choices include a few agencies that charge a percentage of any money recovered. Some others provide the possibility of a fixed price, flat fee, that can be very cost effective for most health clubs. Plus, the psychological influence of a dispassionate third party may make the difference with the majority of late bills.
David P. Montana has thirty years expertise as an industry skilled, economic specialist plus published author in collection agency services. David provides additional beneficial internal collection tips and information regarding health club debt collection strategies.