How to Decrease the Time Spent on Chapter Dues Processing

Although the idea of changing such a long-standing process is daunting, you know a more efficient one will allow staff and volunteer leaders to dedicate more time to what really matters—delivering value to members.

When chapters are run by volunteer leaders and small staffs, it’s in everyone’s best interest to relieve their administrative burden by finding ways to streamline and standardize processes. National has to take the lead on this effort because you have the resources and expertise to design and manage a more effective dues and data sharing process.

Challenge #1: Data Reconciliation

You never know what type of data will accompany dues payments from chapters. Chapters use different membership applications and consequently collect different sets of data—data that’s formatted in all kinds of ways.

And, there’s a good chance they use multiple payment processors too. The payment data you receive isn’t accompanied by the unique member IDs you need. For example, when payments are processed with PayPal, someone in your office has to spend time verifying which member paid the dues so they can credit the right account.

And everything has to be done manually—the join and renewal information is matched with payment data and entered into your AMS. Is it all done perfectly? Of course not, humans make errors, especially when they try to get it done fast.

What if you could get the same set of data in the same format from every chapter along with a unique member ID that’s tied to the payment? Sounds too good to be true? Stick with us here, it’s not.

Assign a unique member ID number to accompany future dues payments. By the way, your colleagues will love you for doing this.

Understand how unique member ID numbers are used in your AMS and within your organization.

Working with your IT and accounting department along with chapter representatives, develop a plan for getting chapters to use those ID numbers.

Offer chapters a self-service portal that’s tied to your AMS where they (or their members) can enter, update, or upload data. You’ll reduce the data entry burden on staff and encourage compliance with your business rules.

Figure out how to give chapters the permission to enter, update, or upload member data to your AMS via a chapter portal or other solution.

Here’s how that looks in real life. We know a national association with more than 700 local and state affiliated associations. The local affiliates collect and send dues to both their state and national association—reconciling that dues was a challenging process to say the least.

National made the decision to reduce everyone’s pain by unifying the process so more time could be spent at the local, state, and national level on growing membership and offering better programs, not on data reconciliation and entry.

National offered local affiliates a few variations of join and renewal forms for their websites. The local affiliates can add their own branding and additional fields. The data collected in these online forms is automatically piped into National’s AMS. The dues are split and disbursed automatically (and appropriately) between the local, state, and national associations.

“One side can’t fix these problems alone. National and chapter reps must work together to identify problems and come up with appropriate solutions.”

You can imagine how much National staff loves this new process. The local associations are receptive to the new process too because it eliminates the need to spend hours allocating funds and formatting data for their state and national associations. And, they save money because they no longer pay the state and National association’s share of payment processing fees.

Challenge #2: Payment Reconciliation

Collecting member data from chapters is challenging enough, the headaches increase when you receive all kinds of payment files (for example, PayPal, banks, Authorize.net) from your chapters. And, the funds are transferred from chapters to National at different dates—you never know when they’ll show up.

Your accounting team has to spend lots of time investigating and fixing problem transactions. And let’s not even talk about deferred revenue, yikes. Where do you begin to straighten out this mess?

Synchronize the transfer dates for funds.

Talk to chapter staff to understand why they transfer funds to you when they do. Discuss the challenges their lack of timing presents to National, and the impact of those challenges on your ability to support them.

Get all chapters on the same payment.

Organize a National/chapter working group to research a standard payment processing solution. We’ve learned that chapters often recognize there’s a better way to do business, but they’re waiting for National to do something about it.

Offer an integrated payment solution that automates dues processing and reduces time spent on data entry and reconciliation.

Talk to your accounting, membership, and IT teams about the pains related to reconciliation challenges. Form a working group of National and chapter staff representatives to discuss possible solutions.

“Think about an incentive you can give to chapters in return for their participation in a new process or adoption of a new system. Start with a small beta group that represent different sizes and types of chapters. Once they’ve tried out and accepted the new process, turn them into selling machines (champions) of the new process. Other chapters are more likely to listen to their peers than to National.”

Challenge #3: Data Formatting & Reporting

One of the biggest frustrations we hear about from national associations is the difficulty they have getting their chapters to share member data—and share it without National having to nag them for it.

Without a reliable and standardized method of collecting, sharing, and reporting data and information, you can’t easily identify who’s joined, paid, and renewed. How many members does the chapter really have? Is membership/retention trending down or up? What type of programs are they hosting? How often?

A lack of standard data sharing and reporting also slows down dues processing at National if staff has to take the time to contact chapters to verify names and numbers. For example, if the chapter is supposed to send $50/member to National, but you don’t know how many members the chapter has, the process (and sense of trust) can get complicated (and compromised) quickly.

You need accurate chapter data and information to assess membership and financial trends, evaluate chapter performance, and know what activities help grow chapters and engage members. If you can provide better chapter analytics to your colleagues in the membership, marketing, and education departments, they can use that data to plan more effective programs and marketing campaigns. A unified process can help you analyze chapter data and share chapter best practices.

Find out if chapters know which type of data they should collect from members.

Make sure they understand how this data is used by National and how they could use it too.

Survey chapters to see what accounting systems they currently use. Take advantage of this opportunity to upgrade them from Excel spreadsheets and checkbooks.

Work with your accounting team to understand what payment formats are most helpful and useful to them.

What are their pain points with the dues process?

Rebating money back down to chapters?
Deferred revenue?
Time spent on reconciliations?
Reporting from chapter to national?

Get the accounting team involved in developing solutions to solve these problems.

Identify the costs of your current process on staff time and revenue, including the lost opportunities to deliver value and spend more time on strategic and value-laden tasks.

How many hours does the process take now every month?
How many inefficiencies exist?
Why hasn’t the process been changed?
How do you make change/improvement a priority?

Solutions:

Integrate data at the local level into the national AMS.
Integrate chapter accounting systems with National.
Provide a standard chapter accounting system. Because of the annual turnover in volunteer chapter leaders, the new system must be easy-to-learn and user-friendly.

“Develop a business case for your association’s investment in a National-hosted system or other solution. Focus on how the new technology will help your association achieve its strategic and business goals. Prepare your case and create a groundswell of support by asking the accounting team about the problems they’d like to solve. Ask your membership team and other colleagues about the real-time chapter data they need to better understand members and chapters.”

Highlight the benefits for National and its chapters:

Quicker and more accurate reconciliations and reporting.
Ability for national staff to go into local systems and pull reports, review data, import/export data, and set reminders.
Ability for chapter staff and volunteer leaders to spend less time on administration and more time delivering value to members.

The way your association and chapters collect and share dues and data affects your relationship. A dysfunctional dues process strains the relationship. Improve the process and watch the relationship strengthen. Our next post will provide solutions for some chapter-specific challenges with dues processing and other financial responsibilities.

Challenge #4: Dues Disbursement

No one likes waiting to be paid. You can’t pay bills until the overdue payments arrive. Resentment brews. Unfortunately, delays in dues disbursements are a frequent occurrence in the National-chapter relationship.

“We’ve heard of national associations waiting more than 45 days to receive their portion of dues payments from chapters. And, vice versa: National taking too long to rebate dues to chapters.”

What’s worse, the delay itself isn’t the only problem. Sometimes chapters send the incorrect amount of dues to you. Or, if you have no way of knowing how many members a chapter really has, it can’t be sure the amount sent is even correct.

Aggravating Issues

One party (National or the chapter) ends up paying more than their fair share of processing fees—they pay the entire fee even though they only keep a portion of the dues. All these problems can be solved if National sets up a better way to collect and disburse dues more quickly and equitably.

How can National help ease the time burden? How can you help them understand how to accomplish these tasks more accurately and quickly?

Follow up with chapter staff/leaders to make sure the training and/or coaching is effective. Are they implementing and following your best practices? Do chapters think these practices work? Can you tell if they work?

Identify the causes of these problems by talking to and/or polling chapter staff and volunteer leaders. Lack of time? Lack of knowledge? Lack of motivation? All of the above?
Help chapter staff and volunteer leaders cope with these administrative tasks by offering online training and coaching. As a bonus, these supportive resources will reduce the burden of leadership—and hopefully help the chapter’s leader recruitment efforts.
Appoint a National/chapter working group to discuss dues processing issues, the impact of those problems, and possible solutions. Use a standard payment solution that allows bank drafts or automated clearing house (ACH). ACH is a growing trend in the financial payments industry as more consumers become accustomed to this method.

ACH also makes monthly dues installments and membership auto-renewals easier because the account information doesn’t change as often as credit cards. (Although, card networks are implementing account updater functionality to solve this problem.)

Itemize payments through your standard payment solution so each party covers their own portion of the fees: $X is automatically deposited with National and $Y automatically goes to the chapter.
Integrate payment and member data into your (National’s) AMS. We can talk more about this solution offline, if you know what I mean.

We know of an association that didn’t receive funds on time from chapters. Plus, they weren’t confident in the data received from chapters and suspected that member numbers were under-reported. They also spent a great deal of time looking over the shoulders of chapter leaders who weren’t too financially savvy.

To relieve the administrative burden of chapter leaders (and solve those other problems), they now leverage a payment bridge from their AMS to a financial/payment solution through which all funds and information flow when member payments are made at the chapter level.

The data and appropriate financial information now flow to the member record in National’s database, and from there the payment information and records flow into National’s financial management solution.

Tip: Present any new solution (change) in terms that appeal to the chapter’s perspective. Because no one likes change, focus on how the solution solves their problems and how it will positively impact their staff/volunteers and members.

Ask Them: “Would you be willing to receive data and money instantaneously if we set up a way to collect it and we paid our portion? We’ll solve the administrative challenge for you, decrease your costs, automatically create the accounting and general ledger entries for you to track and report, and instantly send the funds to your bank account?”

Now, how can they pass up that solution? You can sweeten the pot by telling them you’ll arrange technical support and training, data backups, and system security.

Challenge #5: Financial Mismanagement

Chapter funds are mismanaged in two ways: unintentionally due to staff or volunteer leaders’ lack of bookkeeping or financial experience, or intentionally due to fraudulent activity. In either case, it’s a problem for chapters, National, and your mutual members.

National and the chapter lose revenue.
The chapter loses credibility.
Heads will roll because they’re guilty and/or guilty by association.
The chapter is closed and members lose valuable benefits.

The best thing to do is to not put chapters in this position in the first place.

Understand all the nuances of the problem at hand.
Involve your accounting and membership teams in this project so you can identify chapter reporting gaps, data issues, and reporting capabilities.
Talk to chapters so you understand the pains they experience at their end too.

Chapter Treasurer is not a sought-after job for a reason. Members don’t have the time (or the desire) to work on financial and data reports at night or on weekends.

Provide the training and support needed to alleviate the problems caused by chapter leader turnover, lack of bookkeeping or financial experience, and lack of time.
Training isn’t a one-time event. Provide training for incoming leaders and refresher tutorials for veterans.

Solutions:

Set up a standard fiscal year and chart of accounts for chapters.
Integrate chapter accounting software with National’s software.
Provide a standardized accounting system and payment solution across chapters.

By providing solutions to help chapter volunteer leaders (and staff) focus on what’s really important, you’ll reduce their stress level and help make the leadership role more desirable. Plus, you’ll ensure that data and information flows in a timely manner between your association and its chapters.

Challenge #6: Missing Chapter Data & Information

You need data to help you (and your chapters) understand members and prospects so you can make better marketing, membership, program, and budget decisions. But, for many of you, this isn’t so easy because your chapters don’t share the member data you need.

For example, if chapters don’t send the data fields related to age or career experience, you can’t compare the behavior of younger members or early career professionals to that of older or more experienced members. You don’t have the data you need to develop and market programs that speak to this crucial demographic.

National associations sometimes have problems getting information from chapters about their activities and finances. Without this information, it’s difficult to assess chapter performance, address the problems of at-risk chapters, and share the best practices of successful chapters.

One reason: chapters simply don’t collect the data you need. An effort to educate chapters about the value of this data could solve that problem as long as it’s easy for them to share the data. Remember, you may be dealing with busy volunteer leaders who have difficulty finding time for chapter work.
Another reason for the problem: chapters do collect the data but don’t share it with you. You need to find out if the real problem is your relationship with chapters, or simply a logistical issue that can be solved by improving the process.

Many chapter dues processing and data-sharing problems persist because the national association and its chapters have communication and trust issues. The relationship settles into an ‘us vs. them’ pattern. If you experience this in your relationship with some of your chapters, we shared some advice and tips for building trust in our two posts on creating data-sharing partnerships with chapters.

Your first task is to repair your relationship with chapters by committing to common goals, acknowledging the value each partner brings to the relationship, establishing regular communication, and building trust.
Then, organize a National/chapter working group on data governance and analytics.
Identify the member data that National and chapters will use.
Develop a plan to collect and share that data.
Identify chapter metrics or key performance indicators (KPIs) that will measure chapter performance and help you distinguish between successful chapters and struggling chapters.
Develop a standard chapter reports so you have “a single version of the truth.”
Give chapters access to a National-hosted system to facilitate data sharing and reporting.

“It takes more than words to build trust. To build stronger relationships with their chapters, the CEO and component relations professional (CRP) at the Association of Corporate Growth went on a chapter listening tour. They made calls and onsite visits to chapters so they could hear about their problems and their ideas for growing membership. The chapters appreciated the personal outreach.”

Challenge #7: Administrative Burden on Volunteer Leaders

When chapter members step up into leadership positions, they don’t always know what they’re in for. Even if they do, the demands of the ‘job’ are often more than they can handle.

For example, volunteer leaders may not have financial or bookkeeping experience so they don’t know how to manage incoming funds, allocate funds, and ensure National gets their fair share. Even if you provide the training they need, a new crop of leaders (and their steep learning curve) will come along next year or the year after.

Always treat these volunteer leaders as an endangered resource because they have a high risk of burning out on the job. They don’t have enough extra time in their life to run the chapter and take care of administrative tasks like dues processing and reporting in a timely and accurate manner. And, truthfully, they should focus their limited time on delivering value to members, not dealing with tedious administrative processes.

Talk to chapter leaders to find out what type of support would be most helpful. Which aspects of the tasks required by National cause the most pain? What would alleviate that pressure
Research solutions that could solve these challenges—solutions you could potentially endorse or subsidize.
Provide a standard chapter accounting system hosted by National, or provide integrations for chapter systems with the National AMS. This option provides additional oversight and better positions you to provide training and support.
Offer an integrated payment solution that automates dues processing and reduces time spent on data entry and reconciliation.

The “next steps” and “solutions” for the seven challenges discussed in this series of posts have a common theme: National and chapters must solve these problems together. You can’t push a solution down onto chapters. Without their participation in developing a solution, you won’t identify the real problem and you won’t earn their buy-in and cooperation.

When you gather your working group of chapter representatives, look for a diverse mix of:

Chapter staff and volunteer leaders
Large and small memberships
Basic and advanced technology users
Supporters and nay-sayers

Appoint National representatives from:

Component relations
Accounting
Membership
IT

Any project requiring an investment in technology must also have the support of an executive sponsor at National. The executive sponsor is the project’s champion and advocate. They ensure you get the budget you need as well as other resources, such as staff cooperation, by running interference with department heads.

Your National/chapter working group must be guided by these principles:

Agree upon common goals.
Acknowledge the value each partner brings to the relationship and to your mutual members.
Discuss the good, the bad, and the ugly—especially the ugly.
Understand the reasons people resist change because you will encounter resistance. Develop your empathy muscle—put yourself in their shoes.
Listen and communicate frequently. Create channels for chapter feedback and send out regular updates.

The dues and data sharing process can be a huge impediment to improving the relationship between national associations and their chapters. Chapters put up with challenging processes because they don’t see any other choice. But you can give them a choice and a break by creating a dues and data sharing process that works for both of you.