Ryan Vaughn explains why gym owners should batch member charges twice monthly instead of charging per deposit or picking one billing day. Using the Profit First system, deposits accumulate in an income account and get allocated on the 10th and 25th, cutting merchant fees and simplifying cash flow. ACH payments cost less than credit cards.
Uh, the question I want to answer today is related to the allocation day, the 10/25 rhythm. I had a gym owner reach out to me and he explained his scenario. He says throughout the month he is taking in member deposits, um, all throughout the month, but for the allocation days to work, should he Force all of his members— and force isn't the right word, and that's not the word he used— but should he ask all of his members to, uh, that he can charge them on the same day every month, or should he be taking a percentage out of each of those deposits as they happen? Well, this is where the 10/25 rhythm is so glorious. And again, 10/25 is just referring to the 10th and the 25th of the month, and that's when you would sit down And actually allocate money from your income account into your other essential 7 accounts or more if you have them. And we do have clients who do weekly, which is totally fine. The idea is at least once a week or twice a month, you are sitting down to allocate income, but you certainly don't do it every day. In fact, in the book, I explain a scenario of one of our clients who was doing it every day. Which we didn't know until he expressed his frustration with the system. He's like, this system just isn't working, man. It's way too much work. Which is the opposite. Profit First actually makes cash flow management super simple and reduces the amount of time and energy and brainpower that you're spending on it right now without Profit First in your life. And we found out he was doing daily allocations. Yeah, that's too much. Weekly, nothing. It doesn't need to be more than weekly. You don't necessarily have to change the timing of your customer deposits. That's actually why we have the income account built in there. So the income account sits there and throughout the week deposits hit the income account. Then at the end of the week, you sit down and allocate all of the money in, in the income account into the different accounts. So again, whether that's weekly or on the 10th, the 25th, or any other days, 15 days apart, The income account holds those so that you don't have to worry about taking percentages out of each deposit. Now, there is another factor involved in this scenario, and that is your merchant processing fees. So it's not a bad idea to only charge your members on certain days of the month. So even if they come in and bring payment information or they're signing up at different times, You can still say, I'm gonna bill you on the 10th and I'm gonna bill you on the 25th. You've now reduced the batches, as merchant processing people call them, and there's a fee on every batch. So you've now taken what probably was 20 batches a month and shrunk it down to 2. So you would have saved money in that regard. Um, and then just on a separate note with that, if you get your members to pay all ACH, ACH fees are way less expensive than charging credit cards. So there's a couple just bonus tips into this. But yeah, the idea— the, the question that I wanted to answer on this video is, um, do you take the percentage out of every deposit, or do you only charge your members once a month? The answer is neither. You follow the Profit First system. You have income deposited into your income account. You sit down weekly or twice a month and then allocate money at that time. And that's the solution. So profitability is a choice. Be financially resilient.
