Monday, March 22, 2010

The Difference between a Membership Renewal and a Membership Invoice

Posted by Princess Eva Angelica at 11:30 AM

Sometimes I see the terms renewal notice and invoice used interchangeably in membership and circulation development. I thought that it might be helpful to point out that there is an important legal difference between the two.

“An invoice is a bill sent by a provider of a product or service to the purchaser. The invoice establishes an obligation on the part of the purchaser to pay, creating an account receivable.”1

However, when a membership is up for renewal, there is no obligation to pay and no account receivable. The member has not received anything and has the option to pay, but no legal obligation to pay. Therefore, a renewal notice is not an invoice and cannot use the word "invoice"

There are cases where an invoice can be sent to a member. An invoice is acceptable if a prospective member requests to be invoiced from a membership solicitation or from a renewal notice. In this case, because the member has agreed to take on the obligation to pay, an invoicing the member is the proper response.

By the way, if you need to redesign your renewal notice based on this post or for any other reason and want a sample of a successful membership renewal notice, please let me know and I will send one along to you.

1. Jean Murray, Guide, US Business Law/Taxes


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