How to Collect More MoneyBy heatherf posted in ABC News
- July 30th, 2012
By: Tyler Rice
Chief Operating Officer at Aldous & Associates, PLLC
As a club owner, you can anticipate anywhere from 5% to 25% of your term and month-to-month contracts going past due. At the 90 day delinquency mark, the account is marked Returned For Collection (RFC) by ABC. These accounts still owe their money, but they are not cooperating. Here are some strategies to collect on these contracts your staff has worked hard to sell and maintain.
- Get as much information as possible at the time of sale using a solid contract
- Don’t lose focus on your sales by spending time and money on “in-house” collection approaches
- The longer the account goes unpaid, the harder it is to collect
- Use a third party that has YOUR interest in mind, and follows the FDCPA (Fair Debt Collection Practices Act)
When you write your contract keep RFC accounts in mind. Include language that allows collection and attorney fees as well as the ability to recover all costs of collection. If you start your member-club relationship off on the right foot, it will eliminate many collection headaches down the road. Train your staff to get as much information as possible at the time of sale – multiple phone numbers, reference phone numbers, e-mail, date of birth, place of employment and addresses. This information is what is used in the collection process; therefore the more personal information on the contract equals more money collected.
Don’t waste your valuable resources on collections. Every month the member goes behind on payment, they are increasingly uncooperative and harder to collect. When a member is RFC it is time to pass this problem onto a third party that specializes in debt collection.
The third party you select should have a call center campaign, along with the ability to use legal methods to motivate payment. Good firms will work on a contingency basis, with no sliding scale. It is best that a firm does all of the necessary collection functions - letters, live outbound call campaigns, credit reporting, and the ability to use legal action – under one roof. They also need to have your best interest in mind. These are still YOUR contracts - YOU own them and you decide how you want them handled. You should have freedom, without fees, to cancel or adjust accounts that should have been canceled or updated. If an account pays less in order to get back on draft, you should not be penalized by your third party. The third party works for YOU.
By being thorough in the sales process, spelling things out clearly in your membership agreements and working with a collection agency that works for you, your chances of collecting more money increases significantly!