the member gets a polite reminder let- ter. If the debt isn’t settled shortly there- after, a stronger letter is sent. Finally, a third letster informs the member that the matter is being sent to a collection agency.

notify you. 2.

“The system is a dream for the fitness

staff,” says Glenday. “It keeps us working positively with members versus being the bad guy. Our business is to make people happy and healthy.” Geoff Del Grande of Fitcom Services, the company that provides the service for the club, agrees that it can be chal- lenging to play two roles. “It’s a hard switchove trh feor fitness people – moving from the adrenalin rush of dealing with a member o with a delinquent account to then befiong a warm and fuzzy fitness professional.”

Outsourcing the job makes financial

sense too, says Del Grande, who has been in the business for 10 years. “We don’t charge the club for collecting the overdue fee,” he explains. “Instead, we charge the member a $25 late fee.” The club has the option to waive the fee if the person is a longstanding member, for customer ser- vice reasons or for any other reason.

Marc Bourgeois, of Merchant Treasury Require members to com-

plete membership agreements in per- on or on-line, not over the telephone. The mar in for too great. 3.

ranscription errors is Est blish detailed systems

and administration duties to han- dle your accounts receivable (and ac- counts payable) and to accommodate your club’s growth. 4.

If there is a payment issue,

follow up quickly, diligently and po- litely. If members are embarrassed or intimidated, they won’t come back to club, ven if it was an honest mis- take. Let them know that these types f mix-ups happen so they feel com- rtable retaining their memberships.

Services, a Calgary company that pro- vides a similar managed payment pro- cessing service, agrees that hiring a third party to manage your receivables makes good financial sense, especially if you have a growing membership or more than one club. “If you’re a small key club with only two staff you can likely do it your- self,” he explains. “But as your number of members increases, so does the num- ber of returns. For example, if a club with 1,000 members has five percent or 50 items bounce per month, when it grows to 3,000 members now it’s 150 payment problems per month.” It’s difficult to run a successful op-

eration if you’re not collecting your bad debts, notes Bourgeois. “In the fitness club business five to seven percent of all ac- counts receivable go NSF. Clubs that don’t collect it aren’t likely making a profit – seven percent is a pretty big chunk of money.” FBC

Barb Gormley is the managing editor of Fitness Business Canada, a freelance fitness writer and a certified personal trainer. Contact her at www.bar- bgormley.com.

5 tips for avoiding delinquent accounts

5. Have your lawyer sign the

 Carefully design your mem-

bership agreement. Require a void cheque (people often make errors transcribing numbers to a form). Ask for multiple telephone numbers to make it easy to con- tact members if there’s a pay- ment issue; emergency contact telephone numbers help track down members who move away and forget to notify you.

 Require members to complete

membership agreements in per- son or on-line, not over the tele- phone. The margin for transcrip- tion errors is too great.

 Establish detailed systems and

administration duties to handle your accounts receivable (and accounts payable) and to accom- modate your club’s growth.

Geoff Del Grande of Fitcomm

Services, Orangeville, Ont., 519-217- 3484 Elizabeth Glenday, manager Access

Fitness Orangeville, ON. (519-940- 0300) or cell (519-938-6657) Terry Adams, Iron Haven Gym,

www.ironhavengym.com, (902) 853- 3421

letter informing members that you are taking the final step and sending the account to a collections agency. It can also be helpful to mention that collec- tion agencies have the ability to affect members’ credit ratings.

Barb Gormley is the managing edi-

tor of Fitness Business Canada, a free- lance fitness writer and a certified personal trainer. Contact her at www. barbgormley.com.

Sources: Marc Bourgeois Merchant Treasury

Services Inc., Calgary – cell 403-390- 7376, marc.bourgeois@merchanttrea- sury.com

 If there is a payment issue, follow up quickly, diligently and

politely. If members are embar- rassed or intimidated, they won’t come back to the club, even if it was an honest mistake. Let them know that these types of mix-ups happen so they feel comfortable retaining their memberships.

 Have your lawyer sign the

letter informing members that you are taking the final step and sending the account to a col- lections agency. It can also be helpful to mention that collec- tion agencies have the ability to affect members’ credit ratings.

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