Why more sports clubs should use direct debits…

Until fairly recently, collecting membership fees via Direct Debit was not viable for the majority of clubs due to the lengthy and costly accreditation process.  Thankfully that has now changed and many clubs now benefit from using online solutions without the red tape and protracted set-up process.

I still talk to clubs who are concerned about the costs as they see direct debit as just being an additional burden to the club finances.  Yes, there will be a cost, however once we start to discuss the benefits of collection via direct debit with the club they soon start to see this as a positive not a negative.

So let’s talk about costs.  As with everything you need to shop around and clubs must look to minimise the fees.  Lets take two examples:

  • Club 1 – 120 members paying an average of £85 p.a.  Club collects £10,200 p.a.
  • Club 2 – 300 members paying an average of £70 p.a.  Club collects £21,000 p.a.

You can pay as little as 1% in fees.  So in the above two examples you could pay as little as:

  • Club 1 – £102p.a.  fees  (PayPal fees for equivalent would be approx £371)
  • Club 2 – £210 p.a. fees  (PayPal fees for equivalent would be approx £764)

Now some may see £210 as significant when clubs are being managed on a tight shoestring,  So what are the positives that may persuade them otherwise?

  • Reduction in costs if already using PayPal or similar
  • Improved cash flow for the club (knowing when your money will be received and how much you will receive each month)
  • Reduction in debt / non-payment of fees (combined with a strong member database package there is real time visibility of debtors)
  • The ability to collect pro-rata fees from new members from the day they join the club (for some clubs this improves revenue where in the past they may have just charged half year fees or let people off fees if they joined late in the season)
  • A transparent charging system (club management can view reports and records of payment, categories etc to ensure all are paying the correct fees)
  • Less time commitment from managers, team captains and committee members (in chasing fees, banking money, maintaining paper records etc.)

Reducing debt and improving collection of pro-rata fees from new members both combine to help increase revenue for the club and unless you currently have the most robust systems in place will almost certainly mean you easily recoup your costs.

If this isn’t enough to persuade them you can always consider how you could recoup this fee from the members.  If you charge a £1 surcharge to pay by direct debit to each member in the above example for Club 2 you have now made £300 in surcharges, covering the £210 fees with some to spare.  How would a member react to a £1 annual surcharge for the benefit of paying by direct debit?  I doubt they would raise an eyebrow to that.

Consider taking this further.  Would you like your club to operate within a cash free environment?  No more collecting training fees, match fees, kit purchase payments in cash or by cheque from members.  No more paying out cash for mileage expenses, refreshment purchases, coaching and officiating expenses.

There is now a system which allows you to charge and credit members accounts and collect one monthly payment by direct debit.  This is the ultimate in club management but arguably the way forward for us all.

Today may be the day that you decide to bring your club into the 21st Century and introduce direct debits as your new payment option.  Today could be the day you change the way you manage your club forever.

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Posted in Accounting, management, Sports Clubs, Uncategorized, Websites
One comment on “Why more sports clubs should use direct debits…
  1. […] Until fairly recently, collecting membership fees via Direct Debit was not viable for the majority of clubs due to the lengthy and costly accreditation process. Thankfully that has now changed and…  […]

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