By Colin Walker
Name an industry or cause, and it likely has an association in place representing its members. Associations have been around for many years, but their modes of operations have changed dramatically in recent times. Digital technology now drives communication, marketing, research and advocacy, and associations have had to keep pace with this evolving world.
The same could be said in the area of membership payments. Traditionally, associations required membership payments as annual lump-sum amounts—the impact of this mode of payment on individuals’ budgets was often significant. It also provided challenges for associations who would then need to effectively cash flow budget over 12 months.
Often associations could find that as revenue dwindled throughout the year, operational budgets slipped into deficit, and when membership revenue finally came in again in a lump sum, they were starting behind the zero line and could struggle to regain their cash position.
Think direct debit billing
Direct debit billing has the potential to positively transform cash flow for associations. Not only can it give the association regular income over the year, which aids in cash flow budgeting, but it can also boost membership numbers and retention as payments become more affordable over a longer period of time.
Of course, direct debit billing can be introduced incrementally…
- To begin with, say 10% of your membership takes up the offer to pay by direct debit.
- That means the association still gets a bulk of memberships paid up front but with a proportion of monies received throughout the year…keeping cash flow ‘above the line’.
- New members who join the association could go straight onto direct debit—you may make it your preferred or only option going forward.
- Then gradually over time, your direct debit billing proportion increases, along with your overall financial position.
- Your membership retention is also stronger because it’s more affordable and continues on a rolling payment plan.
Other ways associations can use direct debit to benefit members
Associations can also use direct debit billing as a way to make participation in association activities easier and more affordable.
For example, participation in trade shows, conferences, awards dinners or professional development programs can sometimes be prohibitive because of cost, but what if you offered members the opportunity to pay these expenses off in smaller portions via direct debit in the lead up to the activity?
It could open up a world of opportunity for your association and your members!
Read more about other ways PaySmart can make running your association easier or talk to a local PaySmart Business Development Manager to arrange a meeting with your association where we’ll show you how easy PaySmart is to use for association staff and members.