3 Solutions to Uncollected Funds

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Uncollected funds are a significant problem for youth sports organizations across the United States. It does not seem to matter what sport we're talking about, what part of the country we're talking about or whether we're talking about major sports or fringe sports. The plain and simple truth is that youth sports, travel and club sports in particular, are expensive and tough for people to afford. The best estimates available indicate that the industry average with respect to uncollected funds is 8-12%, and we at PaidUp thought it might be helpful to offer a few solutions for club directors to consider when budgeting and figuring out how to address this problem.

Front-End Load Payment Schedules

Managing cash flow and avoiding uncollected funds is a major priority for any small business, especially for youth sports clubs due to the fact that many are not trying to make a profit. Given this fact, it is often helpful to structure payment schedules so that a parent pays a little more at the beginning of the season and a little less at the end of the season.

For example, for a club trying to collect $1,000 in registration or team dues over a 4 month period it is often beneficial to structure a payment schedule that requires payments of $350, $350, $150, $150 instead of just breaking the payments up into 4 even increments.

This serves to enhance cashflow and avoid uncollected funds because more money is being collected at the beginning of the season. In this example payment schedule, 70% of what is owed is being collected in the first 2 payments.

Stop Taking Cash & Check

We find that over half of all clubs in the United States are still taking cash as their primary form of payment. This fact is a significant contributing factor toward uncollected funds. Occasionally, in working with parents of athletes, we are asked if cash is an acceptable form of payment.

For PaidUp, cash is not accepted and is frankly discouraged. However, we do offer a reasonable solution to parents who feel they must pay in cash. Our support team, when we are working on behalf of a club, will simply communicate to the parent "the next time they are at the grocery store, take that cash, pickup a pre-paid card and come right back into our system and we'll get you taken care of."

A simple solution that seems to work for most because we've never had a parent communicate back to us anything other than a positive response. Checks can easily be handled as Bank ACH transactions just by using the routing number and account number found on the bottom of the check. ACH transactions are much cheaper too.

Establish a Process for Following Up On Missed Payments

Following up on missed payments and custom payment schedules gets super messy and often this is where a lot of money is left on the table. In our experience, most clubs are just not setup to handle the ongoing administrative burden associated with addressing missed payments or the ongoing maintenance of managing custom payment schedules.

Understanding that hurdle, one solution is to set payment dates that are uniform across the entire organization. For example, setting all payment dates on the same day of every month at least allows a club director to allocate time toward managing this important process because they know what day of the month failed payments will require follow-up. Clearly this isn't always the best solution for the parent, but at least it establishes a manageable process for the club and any staff or volunteers responsible for managing payments.

We recognize the topic of managing payments and cashflow is much more complicated than what can be addressed in this short blog post, but hopefully these are solutions that can be implemented immediately and certainly in advance of the upcoming season. If you have other processes you use, we would sure love to know about them so always feel free to shoot us a quick email at support@getpaidup.com. Happy collecting and good luck during tournament season!

For more education on running a volleyball club, click here.

About the Author

Allan is a new contributor to the Junior Volleyball Association, but is CEO and Co-Founder or PaidUp, a company entirely focused on managing payments and cashflow for youth sports organizations. For more information on PaidUp, please visit us online at https://getpaidup.com/newsite or on social media at @GetPaidUpNow


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