Today, I want to address a really great question about managing monthly charges for your members…
You may be wondering, should I be asking all my members to be paying their membership dues on the same day every month? For example, everyone is billed monthly on the 10th of the month…
This question was sent to me by a client who was struggling to realize, with the Profit First System, the importance of sticking to allocation days.
This gym owner currently had all his payments being collected from his members and deposited into his income account randomly throughout the month. The client was unsure whether or not they should be allocating a percentage of EACH individual transaction OR if they should request all their members move to paying on the same day every month.
In my book Profit First For Mircogym I actually share a scenario of a client who came to us struggling with managing this system because, come to find out, they had misunderstood the importance of sticking to the Allocation Days (should be done once a week AT MAX). This client had been doing this piece EVERY SINGLE DAY and they were understandably burnt out!
This just DOES NOT WORK…Instead, stick to the Allocation Days, as laid out in the Profit First System. Let the money funnel into your income account, then on allocation day, transfer into the appropriate accounts based on the percentage of the ENTIRE AMOUNT. This will help reduce the amount of time and brain power that you are spending on this piece of your bookkeeping.
I will say this… Even though it is possible to easily manage this portion of the Profit First System by sticking to those allocation days, there are a lot of benefits to moving all of your members to a specific billing day each month. One of those is the ability to batch your deposits, not only to cut down on the fees, but also to make it easier to manage allocation days, as you may find it gives you more predictability on allocation day.
As you can see, whether your members are all paying on the same day or different days every month, you will be successful if you just leave your account alone until allocation days.
Remember, profitability is a choice. Choose to be financially resilient.
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