This virtual solution is sometimes called “consolidated banking” because the sub-accounts of every chapter are consolidated under one larger bank account. Consolidated banking is also called:
- Chapter banking
- Component banking
- Concentrated banking
We call it “chapter banking” throughout this paper as a generic term because this banking solution was developed specifically for organizations with chapter, affiliate, or component networks — and it’s unique to the Billhighway platform.
“A big benefit of chapter banking for associations is fraud prevention because fraud controls are built into the platform.”
A Better Banking Model For All Types of Components
Improved oversight and transparency are just two benefits of the chapter banking model — we’ll get into additional benefits in the sections below. This new approach to chapter finances is ideal for associations with subsidiary chapters that run their own bank accounts and do their own bookkeeping, but may not always perform these tasks efficiently.
Associations with components that are independent legal entities will also appreciate the efficiencies provided by chapter banking. If there’s any doubt, the Billhighway adoption team can help you explain chapter banking’s value proposition for independent local and state affiliates. Troy Schryer, Director of Finance and Accounting, Billhighway said.
MINIMIZE RISK & PREVENT FRAUD
Compliance is the only option
Banking and bookkeeping is done in a closed circuit loop following pre-defined best practices and procedures.
Staff and volunteer leaders at National and chapters don’t have to spend time and energy trying to prevent or investigate possible fraud. Fraud is mitigated through processes and workflows.
Allows National Access to Help
If a chapter leader leaves, there’s no need to worry about transferring check signatories (signers) for the chapter’s sub-account or dealing with inaccessible physical bank accounts. National can step in and quickly provide access to the next chapter leader.
Maintains Chapter Banking Controls
Chapters still maintain complete control over the management of their bank account. But, if the association wants, National staff can view account activity and pull the reports they need without having to ask chapters for them.
Manage Your Risk
Rights & Permissions
The rights and permissions that determine what people can see and do are set up during implementation. For example, chapter president Sean only sees what he needs to see: his chapter’s sub-account.
Visibility That’s Scalable
Nate at NATL has permission to view and pull data from Sean’s sub-account and all the other chapter sub-accounts. For associations where this transparency wouldn’t be appropriate, visibility is completely scalable from full to none.
“From a risk management perspective, you can see if there’s something weird going on. You can say, hey, there’s some money going sideways here, in this particular place, and you can act on it.”
– Peter Houstle, CEO/COO from Mariner Management & Marketing LLC
Spend Less Time on Chapter Admin Tasks
Chapters Access Everything They Need
Chapter leaders no longer have to spend hours putting together financial reports for National. Even better, National staff doesn’t have to nag chapters for those reports — they can access everything they need to know.
Focus on Strategic Initiatives
Instead of playing the role of compliance officer, National staff can focus on strategic concerns, like providing chapter management coaching and strengthening chapter-National relationships.
Never Wait For Chapter Payments and Paperwork
For bottom-up organizations, National accounting staff never have to wait for chapters to send payments and paperwork. National’s share of the dues payment is delivered automatically. Accounting staff can carry on with reconciliation and reporting because everything they need is on the screen in front of them.
Auto-routing & Real-time Access For Chapters
For associations where members join and renew at National, and funds are rebated to chapters, the rebate can be auto-routed to chapters. Chapters have full real-time access to the records of their chapter members.
Have Chapter Data At Your Fingertips
Member Engagement Visibility
The lack of data-sharing and member engagement visibility is one of the biggest frustrations that National staff have with chapters. “Inconsistent and inadequate chapter data is an ongoing problem for associations,” said Peter.
Share & Access Member Engagement Data
With chapter banking, that’s a problem of the past because the Billhighway platform integrates with the National AMS and chapter databases. National staff can see financial data (if the association sets it up that way) along with all of its related member engagement data.
National & Chapter Membership Visibility
For example, associations with separate National and chapter memberships can immediately identify prospects — chapter members who are not yet National members and vice versa. Chapter performance data is right in front of you — National staff are no longer reliant on what chapters decide to send them.
Develop Comparative Reports
Chapter banking gives you the ability to develop benchmarking or comparative reports. “It becomes a lot easier for National staff to create a consolidated view of chapter health and performance,” said Troy. “Imagine looking at dozens of different spreadsheets and trying to create a meaningful report out of all that. Those days are over. Now you can actually see what’s going on with one chapter or every chapter in real time.”
See High-Performing & Under-Performing Chapters
The National association can see in detail and in aggregate how chapters are performing. You see where income comes from and where it goes. You can find out what high-performing chapters are doing differently than under-performing chapters. What best practices can you share with other chapters? Which chapters require additional coaching or resources?
Peter said. “You can look across the entire chapter network and see how it’s doing.”
Return on Investment (ROI)
“What’s our profit and loss overall? What’s the return on investment from our component system both individually and in aggregate? How are events and sponsorship programs doing across the country?” This information helps National make better decisions about resource allocation.
Download Our Guide
In the Chapter Banking Guide, we share the basics of chapter banking, how your association and chapters could benefit from the solution, ways to overcome possible resistance, and how your national-chapter relationship can change positively with the solution.