How to address cash flow challenges

Roger Brown, Premium Credit’s Chief Commercial Officer for Fairway Credit, outlines the increasing range of payment options available and the important role they play in maintaining good cash flow for golf clubs.

As we enter a new era of increased financial pressure, cash flow isn’t far from the minds of any owner, manager or club secretary. Covid-19 and Brexit uncertainty have negatively impacted the availability of finances for golf clubs and their members. However, there are options to help alleviate this issue, allowing you and your club to flourish.

The situation we face

Let’s cast our minds back to earlier in the year. We all remember the sudden impact when Covid-19 first hit during the run up to the busiest time of the year for members renewing memberships or new members wanting to play. Those responsible for the finances of the club had other pressures to contend with.

The Fairway Credit fees team, as may have been your own experience, had to quickly respond to a flood of billing questions, provide assistance and reassurance to concerned golfers and apply our robust forbearance policies to help those most vulnerable, sometimes with reduced staff numbers who were often working from home – no easy task.

With potential changes in the circumstances of existing golfers and the opportunity created by aspirational golfers looking towards taking the sport up full time, payment flexibility was and continues to be critical.

Fairway Credit payment options

Membership fees are the lifeblood of any club’s finances. Payment on time preserves cash flow. As the saying goes ‘Cash is King,’ particularly when the fees are paid in a lump sum by the member or through a finance agreement.

‘Financing’ is not always a choice familiar to the club or golfer. It’s a monthly payment option available to the bill payer, either through the club or a third-party finance partner like Fairway Credit.

The opportunity to spread the cost of membership fee payments over convenient instalments is becoming the ‘go to’ option. For some golfers it’s popular from an affordability and efficiency perspective and for clubs it provides a smooth, reliable and compliant cash flow.

There are of course a range of more traditional payment options ranging from Direct Debits, Standing Orders and ad hoc monthly BACS payments spread over 10 or 12 months. Any option run directly by the club takes up valuable staff time, whereas partnering with a regulated credit provider takes away much of the administrative burden associated with schemes run in-house and frees up staff to concentrate on other important duties.

The viability and effectiveness of any payment option depends on the characteristics of the club but without doubt, the option for fees paid through a credit agreement is becoming widely accepted and adopted. Golfers are used to paying for a vast majority of lifestyle expenses through finance and golf club membership fees are no different.

Our support for golf clubs throughout the last 25 years has given us unrivalled experience and access to golfers, golf club managers, owners and a variety of executive boards. We understand your business and as always are here to help the club and its members through these difficult and turbulent times.

“It has been a pleasure to work alongside Fairway Credit during the pandemic. The help and support offered by Fairway Credit with so many changes in membership category and additions / withdrawals was first class. I would thoroughly recommend their service if you are looking to offer an outsourced pay monthly system to your members,” James Brockington, general manager, Henley Golf Club.

Considerations

The questions below can help you review your current arrangements for membership fee collection:

How will this impact the club’s cash flow?

• Do you have enough staff to manage the scheme, could your staff be doing something more productive with their time?
• How do you manage defaulted payments if you run your own in-house scheme?
• Are you happy you can meet the regulatory frameworks under the Consumer Credit Act, BACS and Direct Debit regimes?
• What will this cost the club?
• Are you meeting your members’ expectations and needs?
• Can you provide payment date options and up to 12 instalments to maximise your members’ cash flow?

However you’ve answered these questions, you should explore new ways of collecting membership fees. Outsourcing to an approved credit supplier can make a marked improvement to yours and your members’ cash flow, plus it can increase your staff’s working efficiencies. If you’d like to find out more, speak to one of our experts on: 0207 191 2417