One of the more challenging aspects of your role as chapter treasurer is walking that fine line between business and brotherhood. You are ultimately responsible for holding your brothers accountable, but it’s not always comfortable having those crucial conversations when a brother starts to fall behind. Empathy and business don’t have to be mutually exclusive, but you’ll find that every individual will be different, requiring a different conversation.
For a chapter to successfully collect its accounts receivable, the chapter treasurer and finance committee should ensure membership agreements and social security numbers are on file for all members. OmegaFi will maintain a record of this information. While such resources will undoubtedly increase the awareness of members and success of future collection efforts, the following practices may assist with your efforts to collect delinquent accounts receivable that have been passed down to you:
- Social & Athletic Suspension: A member who is financially delinquent should not be allowed to participate in activities which he has not financially supported. Chapters have identified this technique to be extremely successful, especially when a major function such as a formal or date party is planned.
- Fines: Simply stated, if a member does not pay his financial obligation to the chapter by the prescribed date, a fine or penalty may be imposed.
- Reporting: You may report at each chapter meeting a list of members who are financially delinquent. Mentioning that such delinquency is causing a delay in certain planned activities of the chapter may generate peer pressure among members who are in good financial standing towards delinquent members to satisfy their accounts.
- Withholding Academic Records & Registration: Several schools will place a “hold” on a member’s academic account if he is financially delinquent to a student organization. Such members may not be eligible to receive grades, register for courses, or obtain a copy of their academic transcript until the chapter notifies the host institution that the member has paid.
- Pro-rating: This technique involves dividing any remaining amount of accounts receivable among the members who have paid. The paid members must pay this additional assessment; however, they will receive a credit towards their account when all delinquent members have paid.
- Statement of Delinquent Account: A chapter may submit a Statement of Delinquent Account to the Fraternity’s Staff. A certified letter will be mailed to the delinquent member notifying him of his debt and demanding payment within 30 days. If the delinquent member fails to respond by sending full payment, he will be expelled from the Fraternity. If a delinquent member pays his account after he has been expelled, he may be reinstated (if approved by the chapter). You may add a ten dollar fee to the delinquent account statement to cover the cost incurred by the chapter for submitting this statement.
- Collections Agency: When all other options have been exhausted, you might find it necessary to send the delinquent member’s account to a collections agency. This is generally a last resort, as even if the individual does pay the amount in full, the collections agency will withhold a large portion of that amount as a fee for their services.
- Court Action: As a last resort, a chapter may consider legal action against a delinquent member by processing a lawsuit in small claims court. This process requires that the chapter have accurate records and documentation of the delinquent account.
Membership agreements, describing the responsibilities of the chapter and of individual members throughout membership, are recommended for each chapter. OmegaFi maintains a record of each member’s acknowledgment with their financial record. If a member is a minor, the agreement should be signed by his parent(s) or guardian(s). The advantages of such an agreement include:
- The responsibilities of each party are acknowledged in writing and the member in effect makes a written commitment to pay his fees.
- Parents or guardians, who provide funds to their son for payment of his fees, will be made aware of their son’s obligations.
- This agreement could be legally-binding and used to collect the fee obligations due to payment delinquency or other breach of the agreement. The provisions in such agreements are fully governed by each state’s laws. Therefore, if the intention is a legally binding agreement, OmegaFi’s recommended agreements should be used.
PAYMENT PLAN CONTRACT
A payment plan may be defined as a means either to collect fees in advance or to ensure payment of a past debt by partial payments. Receiving payments in advance can help the treasurer in terms of cash management. Every chapter will occasionally experience a member who cannot pay his fees on time because of circumstances beyond his control. A special payment plan over a period of time could be developed for such members, but these should be limited and potentially carry some financial expense for their development.
For more general treasurer information, take a look at the treasurer handbook.