It’s that time of year again! Everyone is in the holiday spirit of giving, sharing, and celebrating. But unfortunately, the collection agency typically is left out of all the reindeer games. The holidays are historically a slow time of year for debt repayment and the ARM industry. Why pay down a past-due financial obligation when a debtor can spend their hard-earned dollars on new, shiny presents?! It’s a cyclical pattern that is hard-pressed to change anytime soon.
As a collection agency, you probably don’t want to move to another financial year with an extensive portfolio of old receivables. Moreover, at this time, you are probably concerned with meeting end of year targets, budgets, and revenues. So how do you keep your collection agency cash flow steady during the holidays when debtors more often than not go M.I.A.? The following suggestions will help ensure steady cash flow while remaining empathic to your debtors during this upcoming yuletide season.
Since armed with the knowledge your agency may be heading into lean times, take a proactive approach in the months before the holidays, and boost collection efforts. This means your agents will work extra hard to engage debtors sensibly and dynamically. This, in turn, will increase payments in the door and also help keep cash flow steady by making future dated payment arrangments.
First, start by reviewing all outstanding receivables and strategize on how to follow up with these accounts. Bear in mind, the longer a debt stays past due, the more collection effort challenges are likely to arise. Prepare debtor incentives before reaching out, so agents are armed with beneficial ways past due accounts can be paid in full prior to the holiday season setting in.
Personalize Payment Reminders
For some people, the holidays can be a tough time. Individuals can feel a heavy burden to “keep up with the Joneses” and let financial matters slip. Don’t worsen the issue by sending strong and forceful payment reminders during this time. Work on preparing personal reminders wishing holiday cheer instead of being blunt and straight to the point.
Being kind and courteous can nudge the debtor to pay off his/her debts early and keep your collection agency cash flow steady. In the ARM industry, a gentle approach has always proven to be more rewarding than a straightforward one. Not to mention, you probably don’t want to break the holiday spirit.
Take Notice and Take Action
It’s unrealistic to assume your agency will collect all outstanding debts before the year-end. Take notice of debtors who are struggling with their payment arrangements and fine-tune a plan to help them stay realistically on track. By showing goodwill and educating the debtor on the importance of debt repayment, your agency increases the chances of steady cash flow received when times are slow.
During the holidays, employees tend to have other thoughts on their mind then work. Where are they traveling to this upcoming holiday season? What should they buy their cousin Timmy for Christmas? When will they find time to bake grandma’s delicious sugar cookies?
As the team leader, it is your role to push their limits in debt collection to keep your cash flow steady. Agents need to stay motivated to send reminders as soon as possible and follow up on all debts consistently and methodically. If this isn’t done, debtors might use their money on other expenditures. If the majority of your employees will be absent during the holidays, you might consider getting extra help. It’s also advisable to come up with incentives to get agents fired up about collecting. Extra bonuses or additional paid time off, go a long way to motivate employees to excel in their role.
Diversify Your Payment Options
Perhaps most importantly, don’t forget to add flexible payment options and methods that accommodate all debtors. When it comes to payment solutions, diversity is beneficial in increasing your bottom line. Not every debtor wants to speak with an agent to set a payment arrangement. Some individuals may only be available to pay after regular business hours for your agency. Adding web payments, IVR, or recurring billing solutions to your payment arsenal is much easier than you think. Plus, it’s not too late to have a new streamlined and fully-integrated payment system in place before the year-end! Discuss your options with the ARM industry’s most innovative payment provider, Payment Savvy, today to learn more or receive a no strings attached quote.
This upcoming holiday season, keep your cash flow steady by using the above tips. Ensure your agency stays on track, plan for the lull a few months in advance, and your year will end cheerfully with more cash in the bank than previous years.