A left handed update: Where the rubber meets the road - literally! Last Wednesday night I was riding my bicycle home from work. As I was turning right, my front left tire caught a small rut in the sidewalk and shot out to the left. As a result, I found myself flying through the air with no bike underneath me. Apparently I don't bounce like I used to. Two banged up knees and a broken right arm (radial head fracture in the elbow) has slowed me down considerably. I'm in a sling for 3 weeks (luckily no cast and no surgery). No golf for 6 to 8 weeks. Slowly learning how to get through the day left handed.

My bike hardly had a scratch. I rode it home after the crash and then drove myself to the ER and spent a good portion of the night in the hospital. The ER doc told me they were reviewing x rays and suspected a radial head fracture and then left me waiting on a gurney. How times have changed. I happened to have my iPhone in my pocket. By the time the doc returned, I had "googled" and researched radial head fractures using my iPhone web browser, replied to several emails, canceled my weekend golf outings and fielded a couple of phone calls.

Today's lesson is long (I wrote it before the accident), but it is a great new feature in v3.0. One thing to keep in mind - the setup is the majority of the work. Once that is done correctly, it is very easy for the cashier to sell a membership.

 

Membership Dues with Deferred Income:

Inventory Setup:
POS Express' new feature for Membership Dues with Deferred Income gives you several options for billing your customers for monthly dues. To begin, we need to set up the membership products that you are going to sell in inventory. Each membership type will require a new product in inventory.

CASE 1:
The first example will show you how to set up a 12 month single membership. The membership will start on the 1st day of the following month. The current month will be in addition to the 12 month membership and pro-rated from the current day. The first full month will be collected along with the pre-paid amount as deferred income. The remaining 11 months will be collected directly from the customer's bank account via ACH (Automated Clearing House) or direct Bank Debit.

Go to Inventory and click the New Product button. Following the numbered illustrations below:

1. Set the Item Type field to Membership Dues. The Supplier is your club.
2. Select a Sale Category that will be tied to a GL account for your membership dues.
3. Enter a unique Product Code and Description. For this example, I am setting up a Single Membership for 12 months via ACH.
4. Enter your Tax Code, if applicable.
5. Enter the monthly cost the customer will pay for the membership.
6. Click on the Advanced tab.

 

       7.Set the Recurring payment method to ACH.
       8. If you want to charge for the Pro-Rated amount of the current month, check the Prorate Month #0 box.
       9. In the Manually paid months # box, set the number of months you want the user to pay for up-front. In our
           example, they need to pay for the first full month.
      10. Set the Auto paid months # to the remainder of the contract term. In this case, 11 more months (they paid the
            first in advance).
      11. Click on the Save button.

CASE 2:
This next example will show you how to set up a 12 month single membership. However, in this case the customer will be required to Pre-Pay for all 12 months starting on the 1st of the following month. Once again the current month will be pro-rated and charged at the time of sale. The remaining funds will be posted to a Pre-Paid account and recognized as income in successive monthly billing cycles.

Go to Inventory and click the New Product button. Following the numbered illustrations below:

1. Set the Item Type field to Membership Dues. The Supplier is your club.
2. Select a Sale Category that will be tied to a GL account for your membership dues.
3. Enter a unique Product Code and Description. For this example, I am setting up a Single Membership for 12 months via Pre-Paid.
4. Enter your Tax Code, if applicable.
5. Enter the monthly cost the customer will pay for the membership.
6. Click on the Advanced tab.

7. Set the Recurring payment method to Pre-Paid.
8. If you want to charge for the Pro-Rated amount of the current month, check the Prorate Month #0 box.
9. Set the Auto paid months # to the length of the contract term. In this case, 12 months.
10. Click on the Save button.

CASE 3:
The member's ledger will be charged the amount of the monthly dues and the member will be invoiced for the amount. Settlement typically is paid for via personal check or credit card.

Go to Inventory and click the New Product button. Following the numbered illustrations below:

1. Set the Item Type field to Membership Dues. The Supplier is your club.
2. Select a Sale Category that will be tied to a GL account for your membership dues.
3. Enter a unique Product Code and Description. For this example, I am setting up a Single Membership for 12 months via Member Account.
4. Enter your Tax Code, if applicable.
5. Enter the monthly cost the customer will pay for the membership.
6. Click on the Advanced tab.

7. Set the Recurring payment method to Member Account.
8. If you want to charge for the Pro-Rated amount of the current month, check the Prorate month #0 box.
9. Set the Auto paid months # to the length of the contract term. In this case, 12 months.
10. Click on the Save button.

You will need to repeat the above process for each type of membership/term combination you will offer.

Customer Setup:
Before you can sell one of these products to a customer, you will need to add the customer to your database. In addition, if you are going to sell a customer an ACH/Bank Draft type of membership then you will need to collect and record their bank information. (NOTE: ACH is not available at the time of this writing, but it is on the way.) When you click the Add Customer screen, you will see new fields for ACH that will be required for ACH or Direct Debit billing. If you have an existing customer record for which you want to add or edit their ACH/Bank Draft data, look up the Customer, click on the Credit Card tab and you will see the ACH section. ACH/Bank Draft data varies from country to country. Fields available for you to save with each record include the customers banking information as follows:

1. Recipient Bank
2. Sort Code
3. Account #
4. IBAN number
5. SWIFT Code
6. City
7. Region
8. Postal code
9. Address

The Initial Sale of a Membership:

CASE 1:
Sale of an ACH/Bank Debit membership:

In this example, I am going to sell to an existing customer the 12 month ACH product I set up in the inventory section above. Note that the ACH data will need to be in place by month 2 (the first month is collected in advance). So we will let you sell this product prior to entering the ACH/Bank Draft banking data. From the cashier's perspective, this is a simple transaction of a sale to a customer. Follow the numbered illustrations below and note the following:

1. Select a Customer from the Customer list.
2. Enter the Product Code or Description. In this case, Membership Single 12mos ACH.
3. The Qty is auto set to pro-rate the current month.
4. The Tax code is picked up from the inventory setup.
5. The pro-rated product for the current month is displayed on the Receipt section to the left.
6. The first full month is rung up to the Pre-Paid product.
7. Sub Total of the sale computed.
8. Tax on the Sale computed.
9. Total of the Sale computed.
10. Finalize the Sale.

The Customer's Account:
Finalizing the Sale will post the charges and set up the Recurring Charges for the customer's account.
On the Customer's Ledger, you will see the Sale recorded. Since this was paid for with cash the Debit = Credit.

The Customer's Pre-Paid ledger shows the amount of the first full month plus any tax. This money (held here and tied to a liability GL Account) will be used in the next Sale of Recurring Charges.

The Customer's Recurring charge is established as follows (This will come into play in the Monthly Billing Cycle):

CASE 2:
Sale of a Pre-Paid membership:

In this example, I am going to sell to an existing customer the 12 month Pre-Paid product I set up in the inventory section above. From the cashier's perspective, this is a simple transaction of a sale to a customer. Follow the numbered illustrations below and note the following:

1. Select a Customer from the Customer list.
2. Enter the Product Code or Description. In this case, Membership Single 12mos Pre-Paid.
3. The pro-rated product for the current month is displayed on the Receipt section to the left.
4. The Pre-Paid 12 month membership is rung up to the Pre-Paid product.
5. Finalize the Sale.

The Customer's Account:
Finalizing the Sale will post the charges and setup the Recurring charges for the customer's account.
On the Customer's Ledger, you will see the Sale recorded. Since this was paid for with cash the Debit = Credit.

The Customer's Pre-Paid ledger shows the amount of the 12 month membership plus any Tax. This money (held here and tied to a liability GL account) will be use in the next billing cycle.

The Customer's Recurring charge is established as follows (this will come into play in the Sales Recurring Charges):

Recurring Charges:
Each month you will need to run the Recurring Charges. This will batch charge all Recurring Charges for all members as defined by their Recurring Charges setup and applicable dates. The Recurring Charges uses an As-Of Date. You can run the Batch at any time but the As-Of date will drive what charges are applied. For example, if today was June 24 and I wanted to run the Recurring Charges for the month of July, I would select July 1 as the As-Of Date.

To run the Recurring Charges, Go to the Sales screen. From the menu bar, select Sales - Recurring Charges.

This will open the Recurring Charges screen. Set the As-Of date to July 1 and click the Charge button. Note: For Member Charges you MUST use the 1st of the month. This is required to compute pro-rated portions correctly.

You will get a Recurring Charges Have Run message when this is complete. Note that if you run this again with the same date, the software will not double charge anyone. It will, however, pick up anyone you added to the recurring charges after you have run it once. This allows you the flexibility to run the Recurring Charges before, on or after the As-Of date. In addition, it can be run multiple times if need be due to adding a new membership after the Recurring Charges were already run for a given month.

Now, any monies paid in advance are held as a liability and not realized as income until the month in which the dues are applied. You can choose to tax all the money up front (common in the U.K. for VAT tax), or to parse out the tax when you realize the income (common in the USA).

Enjoy :)