September 25, 2014
I speak to a lot of associations, learning the best practices they use to run their business, in order to share findings and thought leadership with you all and the greater association community. A common pain point I hear from many associations is around finances - but it doesn’t have to be so hard. Here are three simple things I learned from associations about how they manage their accounting and finance processes to make their lives drastically easier.
E-marketing is powerful. The ability to send a custom tailored communication directly to a member’s inbox is a treat that wasn’t easily available before the rise of modern technology. But times have changed. Are you leveraging the latest technology to it’s greatest effect? With modern AMS software it’s never been easier to remind your members of what’s due to your association. You can easily setup a trigger that sends out an email if a member owes you money for any reason and provide a way to collect on that debt. And what about upcoming events or campaigns your association is running? Using your E-marketing to drive registrations to an event page is a smart idea in an era where people often have a ton of stuff going on and need to be reminded of all the great stuff your association is doing. You’d be surprised at how many associations don’t do what seems obvious to many others. Oftentimes, this low-hanging fruit can be a game changer for your association’s revenue stream.
"You can easily setup a trigger that sends out an email if a member owes you money. #association #accounting”
When you put on an event that requires a paid registration, you want to make sure you actually get paid. I’ve spoken to some associations that have difficulty “enforcing” payment for attendees whose money gets caught up in the paper trail or never delivered at all! In other words, some associations have a hard time enforcing outstanding invoices that aren’t paid. When this happens they feel like there is only so much they can do to get that members money without ostracizing them and making them not want to be a part of the organization at all. Associations are forced to write off thousands of dollars each year due to these lapses in payment. The solution that one association came up with is to use an automated collection process. This is a functionality that is built into a lot of AMS solutions associations use - so use it! Using this tool has helped associations to recover money they would have never otherwise recovered from their members, supporting their bottom line when those end of year financial calculations come.
Keeping your ledger up to date is super important for any association. When different ways to recognize revenue come into the picture this can be an even more daunting process. If you’re keeping your revenue in a ledger and deferring it by hand, you’re creating a ton of work for yourself and your association. You’re also opening your association up to the errors that come with managing your association’s ledger by hand, errors that can be fatal to your association. One accounting best practice that has helped an association I spoke to was using their AMS’ deferred revenue recognition. This keeps their books up to date at all times, increasing overall accuracy of the ledger and cutting down work for their staff. This is another feature prevalent in most AMS systems today. Implement a process around this today and reap the benefits of a painless, headache-free ledger.
Accounting and finance can be tricky, but implementing simple processes can help keep your head above water. Have other ways your association gets your accounting and finance processes to work for you? Feel free to share in the comments!