The end-of-the-year holidays can be a challenging time for managing your company’s accounts receivable revenue cycle.
You have the pressure of closing out the year on a high note, on top of the standard holiday pressures and it’s the shortest work month of the year.
Many companies have a reduced staff the week before and after Christmas and there can be a general lack of productivity and motivation.
In order to start out on the right foot after the holidays, you need to start preparing early.
Many collection agencies stop making calls during the holiday season, so if the debt is important to you, be extra proactive.
It may not feel like the best time to take collection action, but many people have numbers they need to reach for the end of the year.
Here’s the best approach to collecting debt around the holidays
Here are some tips for collecting during the holidays:
1. Be Proactive
You have to have a different plan in December; a plan where you work harder than the other months of the year and act more proactively with customers than you typically do.
Start by reviewing all your outstanding receivables and following up on these accounts right away.
Remember that the longer a debt stays in collections, the lower your chances are of getting paid.
Think of ways that you can expedite payments that are past due by sending a courier to pick up the payment or a pre-paid overnight delivery envelope.
If you act quickly and find accounts that may indicate bad debt is coming, you may have enough time to send those accounts to your collection agency and recover money before the new year.
2. Add Season’s Greetings
The holiday season is a tough time for some, so it’s important to be kind and courteous. It’s okay to acknowledge the holiday season and add some season’s greetings to your collection efforts.
Just remember to be patient and understand that not everyone will have the ability to pay during the holidays, so do your due diligence and follow up after the new year.
You might also try to drop off the card or gift in person and arrange to pick up a check from them.
3. Take Notice
This is a good time to evaluate this customer if you are visiting them in person as you might notice some signs of trouble.
You may find that this customer is having their own challenging times and that they have more customers than usual who are not paying them.
Ask the customer questions about how their year is ending up.
4. Take Action
If you happen to learn that the customer is in much worse shape than you thought, it’s time to take immediate action.
Waiting until after the holidays is not going to make it any easier, and it’s a business decision rather than a personal one.
If you wait until January to start collecting, you may find that your account is now at the “back of the line” along with many others.
That customer may now have even less money to pay debts, so it’s important to act fast.
Statistics show that past 90 days, your chances of debt recovery decrease dramatically.
5. Be Flexible
The debt collector must be flexible with payment options, payment plans and other accommodations when attempting to collect a debt.
Working with the consumer to figure out how to get the debt paid off and offering solutions can go a long way.
Nearly 3/4 of Americans spend say they use credit cards for at least part of last year’s holiday debt.