Debt Collection During The Festive Season

The holiday season is great – once you can take time off and enjoy it. Beforehand, there is a lot of running around, extra work and trying to keep track of everything. IT can be particularly challenging time for managing your company’s accounts receivable, and making sure you get all due payments in before you leave for the year. The pressure of closing out the year on a high note with no outstanding debts is high, so you might find yourself chasing payments more than usually. So today we have 5 tips to help you collect all of your debts before you break up for Christmas, so you can relax and enjoy yourself.

Be Proactive

This is key for debt collection in general, but for festive collections in particular. December is a different ball game for business owners, and most are working harder now than in any other month of the year. That means you need to be a bit more proactive with your customers, and with your business finances. Start by reviewing all your outstanding receivables, and follow up on them right away. Remember that the longer a debt stays outstanding, the lower your chances of getting paid, so the quicker you act on this, the better. If you act quickly and find accounts that may indicate a bad debt is on the cards, you have enough time to send those accounts to a collection agency and maybe even receive payment before the new year.

Add Season’s Greetings

Just because you’re chasing for payment, it doesn’t mean you can’t acknowledge the season. Christmas is a tough time for some people, and it’s important to be kind and courteous, even if it’s an uncomfortable topic. It’s perfectly okay to acknowledge the holiday season and add some season’s greetings to your efforts. And remember to be patient, understand that not everyone will have the ability to pay during the holidays, so make sure you do your due diligence and follow up in the new year.

Take Notice

The businesses who tend to be more successful in collecting debts are the ones who pay attention to the little things. If you’re visiting your customers in person, keep an eye out for signs of trouble and evaluate their situation as you see it. You may find that the customer is having their own challenging times at the moment, and they have more customers than usually who aren’t paying them, and it’s having a big impact. Take notice, and ask the customer questions about how their year is ending up to make sure everything is on track for payment.

Take Action

If you happen to learn that your customer is in much worse shape than you thought, don’t bury your head in the sand and wait to see if it gets better – it’s time to take immediate action! Waiting until after the holidays isn’t going to make it any easier, and it’s important to remember that this is a a business decision, rather than a personal one. If you wait until January to start collecting, you will probably find that your account is now at the ‘back of the line, along with many others, and the customer might even have less money available to pay debts. Statistics show that after 90 days, your chances of debt recovery decrease dramatically, so start the process now, no matter how much of a scrooge you feel.

Be Flexible

Above all, you need to try and be flexible. Not necessarily with when you accept payment – you should be clear that you will collect the money you are due, – but with how you collect it. Be willing to be flexible with payment options. Consider payment plans, staggered payments or other accommodations when attempting to collect a debt. Working with a customer to figure out how to get a debt paid is far more likely to succeed, especially if you can offer multiple solutions along the way.

We know it’s never nice to think about debts so close to Christmas. But for businesses, it’s still important to collect money owed to you, especially around the festive time, before business owners shut down and switch off. Some of these simple steps could help you manage payments and cash flow during the most challenging time of year, and get 2023 started on the right foot. If you would like some help, just get in touch with us today.