Best Practices for Handling Late Renewal

We like to hope that the vast majority of our registration renewals happen before the expiry date of your registrant’s license, and in most cases they do. Registrants usually complete their renewals in a timely manner. But every college has registrants that are habitually late for renewal, just like we all have that one employee who’s always late for meetings or the one friend who’s always late for your dinner parties. How do you handle the various scenarios in which a registrant might renew late?

In this post we’ll talk about how regulatory bodies charge late fees, handle gaps in practice eligibility and other issues around allowing online late renewals.

Late fees or penalty?

Some regulatory bodies will either charge a late fee for late renewal or will give an early renewal discount. It amounts to the same thing in many cases, but the way you present the choices is the difference between the carrot and the stick.

The key to charging an additional fee for late renewals is that you must be consistent for there to be any corrective effect on registrants.  If you forgive late fees for one person and not another, then two problems arise.

  1. Registrants talk among themselves—When they find out that they can talk their way out of the late fee, it loses its power.
  2. Fairness and transparency disappear—One of the benefits of using an association management system is that it uses consistent processes for everything. You’re ensuring that all prospective registrants are licensed using the same criteria as their colleagues. If you forgive the late fee for some late renewals and not others, then your overall licensing practices may be questioned. Try explaining that to an auditor!

We always suggest consistently charging late fees even though it may be hard to do, particularly for smaller regulatory bodies where you know all of the registrants. However, ensuring that fees are assessed consistently and fairly every day is critical to maintaining the integrity of any licensing body.

How do I charge penalties?

Your association management software application should be able to automatically charge a late fee, but there may be several methods to charging those late fees.  In this example, let’s assume that the effective date of your regulatory bodies licenses are January 1 of every year and go until December 31. You use a simple one-year fixed term license, and your renewal fees are $250, with the renewal period opening on October 1 each year.

Some examples of how late fees in this scenario might be charged are:

  1. Early discounts—Charge your registrants a little less for completing early renewal.  From October 1–October 31, only charge them $200. Then on November 1, your fee goes to $250. This is the carrot; most of the other examples are the stick.
  2. Late fees—If your registrants don’t renew on time (after December 31), charge a late fee of $50. It may be important that you ensure that your registrants see that this is a late fee on their receipts, particularly for tax purposes. Their $250 in registration fees may be tax deductible, but the additional $50 is likely not.
  3. Graduated increases—Some regulatory bodies choose to slowly increase their late fees. For instance, in our example above, one college starts charging 10$ per day of lateness.  So on January 1, the overall fee is $260, then $270 and so on. By January 31, the fee has reached $560.

How can I avoid late renewals completely?

Some regulatory bodies use an innovative approach to ensure that registrants renew online early.  In the scenario above, the license expires December 31. Some regulatory bodies will set up their association management system to only allow renewals online until November 30 (one month before licenses expire) and the association adverstises such. This means late fees kick in between December 1st and December 31st.

Using this method, the bulk of renewals are completed a month early and the regulatory body can spend the next 31 days handling the people who have not renewed. This method helps to reduce the number of registrants who experience gaps in their practice eligibility.

Should I allow late renewals online or manually handle them?

Okay, so you’re now past the expiry date of your registrants’ licenses and you still have a bunch that haven’t renewed.  How do you handle these?

Many regulatory bodies only allow their members to renew online before the expiry date. This is because, depending on your bylaws, the registrant may technically not be eligible to practice or even renew once they are past their expiry date.

From a technical standpoint, your association management system should easily be able to handle allowing or stopping registrants from completing a renewal late; this situation is more about how your organization wants to handle that scenario rather than how your software handles it.

Regulatory bodies who do not allow online renewals after the expiration of a member’s license often do so because the college has additional requirements for those members (such as the payment of late fees and/or a declaration that the member did not practice during the gap).

How do I handle reporting gaps in practice eligibility?

In the scenario above, if a member does renew late (let’s say they renew on January 10 and dutifully pay their late fee), were they eligible to practice between January 1st and 9th? That may depend on your college bylaws. Most regulatory bodies prohibit practicing while unlicensed, and doing so is often not just a violation of college bylaws but also state/province legislation.

In these cases, it’s important to record that the registrant was ineligible to practice during the proscribed period. So, how do you handle reporting those gaps?  Many colleges and associations will change such registrants from a practicing registration type to an ineligible one. Your association management software should have the ability to create different registration types or registers to handle this scenario. The titles of each register will vary from college to college (often the name of the registration type for unlicensed registrants will be outlined by your bylaws) but some examples are:

  • non-practicing,
  • former member,
  • cancelled,
  • inactive, and
  • suspended.

So, on January 1st, members without an active license should be identified and moved to the appropriate register. Should the member decide to renew, then you (or they) can process a registration change back to the eligible or active list.

Now, when you look back at this registrant’s history, you have a clear picture that there was a gap in practice eligibility:

  • May 15, 2013 – December 31, 2013—Active Praticing (Application)
  • January 1, 2014 – December 31, 2014—Active Practicing (Renewal)
  • January 1, 2015 – January 9, 2015—Non-practicing (Did not renew)
  • January 10, 2015 – December 31, 2015—Active Practicing (From non-practicing)
  • January 1, 2016 – December 31, 2016—Active Practicing (Renewal)

Because you recorded these gaps as distinct events on their registration history, you should then be able to report on them. Reports on registration lapses may also help inform and develop internal programs and initiatives to reduce late renewals and remind members of the seriousness of practicing without an active license.

If a member does practice during a gap in their license, there may be disciplinary actions required by your regulatory body. Ensuring that you consistently record licensing gaps will help your college take any required action, and create an appropriate audit trail of registration history.