The holidays are when families and friends get together to share laughs and spread cheer. This time is usually a challenging one for managing your company’s accounts receivable. It’s important to note; most individuals won’t particularly be motivated to close out their outstanding payments. This is due to already being stretched thin or having other priorities taking precedence. However, there are ways to put your company in the best possible position to not only help you close out the year but make it as painless as possible for your client as well.
Acknowledge The Holiday Season
It’s best to be upfront and show that you know it’s the holiday season, and while it might be a challenging time to get current, it actually benefits your client in the long run. Adding in season’s greetings to your collection efforts shows that you’re human and that you understand the situation. Practicing patience and understanding that not everybody has the ability to pay during this time will help your follow up efforts into the new year.
Be Proactive In Your Collection Efforts
The longer the debt is outstanding, the less chance of it being recovered. Remember, in December, you’re typically working with fewer days. Many people take time off to rest and recharge before the new year. If you find and act quickly to find accounts that are considered, “bad debt”, you might have enough time to recover those before the end of the year.
Take Notice of Your Accounts
Along with being proactive with your accounts, it’s a good idea to take inventory of your client accounts to see if you can identify any signs of trouble. It’s not enough to just notice that an account may be in trouble, take it a step further. Call your client and see what issues they are having and work with them. Understanding that you might not be the only creditor they owe to can help you shape your next step.
Rigidity will get you nowhere. Being able to read the situation, especially during the holiday season, can help you recover more often. Some examples of flexibility include:
Payment Plans – Many people can’t pay a large lump sum at once, so a payment plan you set together is a great way to help both parties. Allowing them to have a hand in this process gives them a stake in their financial future.
Payment Options – Understand that not all people have a credit/debit card; some might need to pay with a money order or feel more comfortable sending you a check. Whatever helps them feel best about getting back to current is an avenue you should explore.
Lump-Sum Option – For particularly tough clients, it might make sense to eat some of the cost of having the debt on your books if they have a way to pay it off sooner in one slightly lower lump-sum payment.
The best way to head into the holiday season is to be proactive and flexible. Understand that your clients might not be highly motivated to get current during this time of the year as their priorities are likely elsewhere. As long as you remain patient and exercise an open mind toward finding creative ways of collecting, you’ll set yourself up in a great position heading into the new year.