Asking your students for money is never easy. When a member of your martial arts school doesn’t pay on time, it’s tempting to let the delinquency slide to avoid confrontation. But you run a business. You deserve to be paid for the valuable services you provide. Still, how can you ask for late payments without sounding cold or impersonal? These seven tips will help you navigate how to collect and prevent late member payments:
Automating credit card and ACH payments through your member management system is an easy way to prevent late payments. Talk to your members about switching to one of these methods if you notice them struggling to pay on time. Be sure to highlight the added convenience of auto-payments and address any concerns about data security.
Review key points of your membership contracts with new students and families. Make sure students or parents sign off on payment amounts, due dates, and the membership duration. Be honest and open about your expectations for on-time payments. Just like your members expect consistent, high-quality martial arts instruction from you, you will expect prompt, full payments from them.
If late payments are a chronic problem for your martial arts school, you might decide to add late fees to your contract. Some gyms and martial arts schools charge late fees of $5 to $25 per overdue payment. For some individuals, the extra incentive will motivate them to stay on top of payments.
Before deciding to use late fees at your school, consider how this will impact your relationships. Ask yourself how new members will react to hearing about late fees before they're even a part of your community. In the end, you'll have to determine the best balance to protect your business without harming your relationships.
You probably already use your martial arts software to automatically remind your members about upcoming payments and due dates. Hopefully, these reminders help prevent late payments before they occur.
Once invoices become past-due, you can use another type of email reminder to collect late payments. Create a short series email scripts to ask for late payments. Be polite but direct. Make sure to clarify any consequences of late payments, including interest fees or deactivation of the membership.
Because phone calls are more difficult to ignore than emails, they’re particularly effective for collecting late payments. Be friendly but firm on the phone. Clearly and calmly explain the details of the past-due invoice and ask for the payment in full. While on the phone, you may uncover new information about your member’s situation that reveals the true reason for late payment. Use these insights to find a long-term solution to help you and your member avoid future missed payments.
Your students are only human. They make mistakes. They forget to update expired credit card information or to check their bank account before payments are due. There are hundreds of reasons students miss payments. Avoiding financial disputes is crucial to maintaining a strong, long-lasting relationship. Before jumping to conclusions, see if a friendly reminder is all that is needed.
In some cases, your student may be dealing with a difficult or complex situation that has impacted their finances. Use good judgement to come to an agreement that’s fair and mutually beneficial to you and your member. It may make sense to be flexible or forgiving in order to preserve your relationship and retain your member.
Collecting late payments is complex and challenging. To truly be successful, you’ll need to dedicate resources to make sure someone is responsible for follow up and collections. If you handle this follow up in-house, make sure to incorporate this task into one of your job roles so it does not become an afterthought for one of your busy employees. You can also outsource payment collection to a team of managed billing professionals to bypass the awkward conversations and eliminate the complicated follow up process.
If you follow the steps above, you'll see your overdue invoices decrease while your relationships with your students improve. In the long run, the combination of these two factors is what will keep your martial arts school financially stable and successful.
Have you tried these tips? How do you encourage students to pay on time? Tell us your thoughts below.