3rd Party Billing

Last updated: August 19, 2026

Third-Party Billing & Subsidy Management

This article details Third-Party Billing, a complex financial engine designed to manage registrations and memberships where an external entity (such as a government agency, school district, or corporation) pays all or part of a member's fees. In Memberworks, this module allows organizations to automate the billing and reconciliation process for these unique arrangements, ensuring that revenue is accurately tracked and collected from the correct source.

1. Defining Third-Party Groups

The foundation of this module is the 3rd Party Group. These groups act as a specialized container for managing organization-level billing separate from the standard member checkout flow.

  • Operational Scope: Third-party groups can be configured to cover costs for specific programs, entire program categories (e.g., Childcare), or memberships (e.g., Corporate Memberships).

  • Organization-to-Organization Invoicing: Unlike standard transactions, which are person-to-org, this system manages Group Invoicing, allowing for bulk billing and reporting to the sponsoring entity.

2. Member Eligibility & Assignment

Once a group is established, staff must assign individual members to it to trigger the automated pricing logic.

  • Localized Eligibility: When adding a member to a group, staff can restrict their eligibility to specific Branches or Sites.

  • Approval Controls: Assignments can include specific "Approved Through" dates and limits on the maximum number of sessions the third party is willing to fund.

  • Importing Logic: To streamline large-scale corporate or subsidy programs, the system supports importing member lists, with built-in logic to restrict the creation of duplicate records.

3. Flexible Billing & Coverage Models

Memberworks supports multiple financial models to accommodate the diverse requirements of different funding sources:

  • Individual Flat Rate: The third party pays a fixed amount (e.g., $50/month), regardless of the program's total cost.

  • Percentage Split: The organization and the member split the cost by a defined percentage (e.g., 70% subsidy, 30% member copay).

  • Full Cost Coverage: The third party pays the entire balance of the registration or membership.

  • Member Copay: A specific fixed amount is assigned as the member’s responsibility, with the third party picking up the remainder.

4. Invoicing & Reconciliation Workflow

The third-party module uses a distinct invoicing path to ensure that "Due Later" amounts are correctly assigned to the external payer rather than the member.

  • Next Invoice Previews: Staff can view a "Next Invoice Preview" dashboard to see upcoming charges for the group and confirm accuracy before the final invoice is generated.

  • Payment Reconciliation: When the third party pays, staff use a specialized Reconciliation Screen to record the payment.

    • Overage Handling: If a third party overpays (due to participant noncompliance or error), staff can classify the extra funds as either a Liability or a Revenue Overpayment.

  • Automated Reminders: The system allows for bulk sending of invoice reminders directly to the third-party group's designated contact.

5. The Corporate Portal

For large-scale partnerships, Memberworks includes a Corporate Portal.

  • Self-Service Management: This portal allows designated contacts from the third-party organization to log in and manage their own members, view current invoices, and track participation.

  • Administrative Oversight: Organizations maintain control over which actions the corporate contact can perform, ensuring data integrity remains within the organization's primary system.

System Setup Checklist for Third-Party Billing

  • Define Coverage: Confirm if the group should use flat rates, percentage splits, or copays before adding members.

  • Map to GLs: Ensure the Third-Party Overpayment GLs are correctly mapped in the GL settings for each 3rd party group.

  • Branch Filtering: Verify that member eligibility is correctly limited to the branches where the subsidy or corporate agreement is valid.

  • Set Reminders: Configure automated notification rules to alert the third-party contact when an invoice is due.