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The fitness industry is the fast-pacing industry of the current era. Therefore, fitness practitioners require strategic implications to comply with the growth of this industry. Accelerating demand of this industry is ultimately increasing the burden of responsibilities, therefore conventional methods are not sufficient to keep up with the market-go strategies.
The customer base must be considered as the key element of the success of any fitness center regardless of the popularity measure of this business. It is important to learn the innovative and current collection management strategies that can help your business to prosper in a competitive environment.
Following are the essence that can help your business to grow in the market:
Gym Memberships as Prepaid Assets:
The amount received in the accounts; is the amount that is uncollected, therefore when your gym receives upfront payment before it has generated revenue, they have not executed proper payment collection. In accounting terms, this makes the payment collected for the sake of membership as prepaid assets, or funding for future use or services.
The carrying value of those membership charges must be reduced through amortization on the balance sheet. It makes the tracking renewals to notify about the membership charges to customers exceptionally important.
Monthly membership charges are also considered as the prepaid assets of the gym and they will assist the managers to ask for pro-rated refunds for unused time unless you clearly state a different refund policy at the time of contract. It can also help to append “no refund” clauses, but it should be refunded often to avoid suboptimal reviews that can degrade your gym ratings.
Comply with the healthcare industry:
The health care industry is also growing rapidly in the market and assure a profitable business in the market. The passive lifestyle and suboptimal diet are leading the number of chronic ailments among the population of the United States of America. Therefore, physicians are recommending therapeutic exercises to their patients to opt for a healthy lifestyle but they don’t recommend any uncertain fitness services.
Therefore, gym centers or other domains of the fitness industry must enlarge their social circle to build a trust-worthy relationship with other industrial domains like health care etc. it will make the doctors recommend these gym centers and result in Trans Promo marketing of your industry.
Physicians recommend therapeutic exercises under the CPT codes, so whenever they recommend fitness training in their prescription then medical billing and coding professionals prepare a claim against the information of the patient’s visit to collect the receivables from secondary or third-party payers.
Consult with medical billing and coding professionals:
It is an essential requisite for the gym centers to hire medical billers or outsource the administrative tasks to medical billing and coding companies. They will act as an intermediate channel between your gym and the health insurance companies. They will prepare claims to collect your payables from the third-party payers as soon as the physician would recommend such therapies to them.
You can reimburse the claims to collect receivables of your services and let you to lower down the burden of financial recoveries and collection management. It will enhance the return on revenue and drive efficient cash flow. It is an interesting fact that the fitness industry is not allowed to follow any policies laid out by the Government of the US, but when they comply with health or any other industrial domain, then they have to follow the standards of HIPAA.
It can also increase the workload on the financial management of your gym if you don’t hire a medical billing specialist for this purpose.There are 209 standards of HIPAA that must be complied with while preparing a claim against a single medical code. There are also new and advanced technical software solution for these purposes that can help to embed efficacy in this procedure.
They also help to keep the membership record safe and secure, so you can concern with the membership record of your customers at any time. This scrutiny feature of security in your system help you to drive defined cash flow and accommodate the customer’s record without carrying the burden upon yourself.
Managing Membership Cash Flow:
It is important to keep up with the yearly membership fees of your customers to monitor the cash flow. Otherwise, you would be entangled in the chaotic situation to scrap for pennies, and lead you to a standstill if an unsatisfied customer demands a refund.
You should acquire the help of Account Receivables mangers to keep the track of refundable and set the membership payments aside in an unearned revenue account, then move amounts over monthly as customers receive their services.
Additional Revenue Streams:
Gym membership covers several gym’s financial requirements, additional revenue streams help to upthrust your bank account. The most beneficial time is the New Year as a huge population decides the fitness evolution as their New Year resolution. They are eager to prepay for their new yearly membership, to meet their new fitness goals.
It is an appropriate strategy to take the optimum benefit of seasonal traffic that will help you to leverage the bottom line of your business. You should consider to set up a juice or smoothie bar, selling bar, pre-bottled protein shakes and other healthy drinks, offering complementary supplements for those who are practicing weight training and cardio.
There is another insight into generating additional revenue is to charge a monthly subscription fee to the new members as a one-time fee charged as the initiation fee, to stay continuously active and engage with their payment activities. You must consider that initiation fees count as deferred income and must be kept as such only for accounting purposes. Financial management is the most complicated task while running a gym but it also has numerous rewards. Driving cash flow smoothly helps take some of the worries out of managing your business while serving the clients with a reliable place to adopt healthy habits.