Penalties for late payers
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Penalties for late payers Greetings, We are having a constant problem of getting members to pay on time. We collect quarterly and have to chase down the same two members every quarter. How do you handle these situations if you ever encounter them and is it wise to include penalties as an amendment in the partnership agreement or by-laws? Thanks for your input! Johnny Johnny, As the club accountant, I deal with this through a mild form of public shaming. We meet and collect dues monthly. I always start the meeting with my financial report, and as part of this, I point to each person who hasn't paid and call them out, as in 'Jane and Lisa are fully paid up, Johnny (pause while I pretend to look up the amount) owes $25, Johnny, you'll need to deposit that before months end'. If by chance we skip a month, I send out a group email and, again, I call out those who haven't paid. This seems to do the trick. Ellen Ellen Shershow Pena Photography 415.690.0278 On Nov 5, 2010, at 10:33 AM, Johnny Duncan wrote:
Thank you Ellen for the helpful advice. I wish that if they join the club, they take responsibility for being members of the club. I'll try your advice. I've done similar before and it worked. Just a hassle to always have to call out the same people. Thanks again! Johnny On Fri, Nov 5, 2010 at 1:42 PM, Ellen Shershow <thatgirl@ellenswebsite.com> wrote:
On Nov 5, 2010, at 10:33 AM, Johnny Duncan wrote:
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Johnny Duncan, PHR johnny@duncanconsult.com 407-739-0718 www.duncanconsult.com http://hrvitamin.blogspot.com Johnny, I totally agree that it is a hassle, but I see it like this: public shaming takes me about 30 seconds. Checking our balance on line and chasing people outside of the confines of a meeting takes at least 23 minutes a month. I don't have the 22 1/2 minutes to spare :) Ellen Ellen Shershow Pena Photography 415.690.0278 On Nov 5, 2010, at 11:00 AM, Johnny Duncan wrote: Thank you Ellen for the helpful advice. I wish that if they join the club, they take responsibility for being members of the club. I'll try your advice. I've done similar before and it worked. Just a hassle to always have to call out the same people. On Nov 5, 2010, at 10:33 AM, Johnny Duncan wrote:
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Johnny Duncan, PHR johnny@duncanconsult.com 407-739-0718 www.duncanconsult.com http://hrvitamin.blogspot.com Johnny, Another good option might be to encourage all of your members to set up EFT or ACH payments with their banks to the club brokerage. These payments can also be set up to occur automatically on a regular basis. Then.....you don't have to spend your time chasing payments. Pam On Fri, Nov 5, 2010 at 1:00 PM, Johnny Duncan <duncan.johnny@gmail.com> wrote: Thank you Ellen for the helpful advice. I wish that if they join the club, they take responsibility for being members of the club. I'll try your advice. I've done similar before and it worked. Just a hassle to always have to call out the same people. --
Johnny Duncan, PHR johnny@duncanconsult.com 407-739-0718 www.duncanconsult.com http://hrvitamin.blogspot.com In our Partnership Agreement, it states that if a member is 91 days delinquent, without a majority approval of the members, they will be automatically withdrawn from the Partnership. So far in my current club we have not had to exercise this clause. In my prior club, we did exercise this provision on two members that were continually behind in their dues and did not come to the meetings but once or twice. Henri Russell
I have taken the position that if a member doesn't get money in on time I don't really care, they just miss out increasing their share that month. We have made it clear when investments are due each month and it is up to individual members to be adults and get them in. If they don't, I'm not going to lose sleep over it. Maybe it's a wrong approach but it has seemed to work. Andy Treasurer Stocks and Bonding Investment Group Sent from my iPhone On Nov 5, 2010, at 11:33, Johnny Duncan <duncanjohnny@bivio.com> wrote: > Greetings, > > We are having a constant problem of getting members to pay > on time. We collect quarterly and have to chase down the > same two members every quarter. How do you handle these > situations if you ever encounter them and is it wise to > include penalties as an amendment in the partnership > agreement or by-laws? > > Thanks for your input! > > Johnny Hi Johnny,
You received some pretty good advice, so far. As you can see, it's a common problem.
In my club, we don't have this problem because we simply don't tolerate it. We are a money club. We pool money and share the load of investing it. If the tardy individuals are laid off or having medical problems, maybe the club is a splurge they can't afford right now. Some people are afraid to leave unless someone gives them express permission. If they are gainfully employed or retired, then they are just being asses about it. I'd handle that a little differently.
First, I don't believe in penalties. Penalties actually give people an option to doing the right thing. Way back in the beginning we had a guy who was habitually late to the meetings. Someone brought up the option of a $5.00 late fee for anyone who showed up more than 10 minutes late. That solved his problem! He paid the duty to keep us off his back. So sometimes it backfires.
I believe in controlling through consensus. Most of our clubs rule by majority. So I suggest putting the matter on the agenda, explaining the problem and offering a couple of solutions (whatever they may be). Open the floor for discussion and let the group vote. Majority rules. Problem over.
Here's what I suggest:
1) Recommend the offending members be put on probation. If their dues are not current at the time of each meeting, they are to be automatically withdrawn from the club. That usually solves the problem.
2) Recommend the offending members must sign up for automatic ACH transfers in order to remain in the club. Otherwise, vote them out.
We are all adults here. There's no reason to be chasing someone down for dues. bivio club accounting is brilliant, in that, it allows us to easily add and remove members from our club with minimal effort from the treasurer. It also tracks our performance based on what we have to invest, not on how many people are in our club.
The mob mentality works well. The point will get across. Don't feel like you have to deal with it alone. Try to remember these are your business partners. You are, after all, in the business of investing. Get it on the agenda, make your case, VOTE.
Lynn Ostrem, President
Crow River Investment Club
We collect monthly. If a member has not paid by the agreed time (the 15th), we remind. If not paid that month, they do not get on bivio as paid. No special penalty. . . just fewer units as market goes up.
On Fri, Nov 5, 2010 at 12:33 PM, Johnny Duncan <duncanjohnny@bivio.com> wrote: Greetings, -- Del -- Back in "Sky Blue Water" Minnesota |
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