Keeping Collection Agency Cash Flow Steady During the Holidays


    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.

    Be Proactive

    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 help keep cash flow steady by making future dated payment arrangements.

    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 before 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—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. A gentle approach has always proven to be more rewarding in the ARM industry 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. Please notice debtors 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 when times are slow.

    Flexible Workforce

    During the holidays, employees tend to have other thoughts on their mind than 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, your role is to push your 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 most 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 roles.

    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.

    To conclude, there are many challenges a collection agency faces. This upcoming holiday season, keep your cash flow steady by using the above tips. Having a strong payment strategy is essential no matter the time of year. 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.

    Chad is a serial entrepreneur and founded Payment Savvy in 2011 armed with the goal of providing high-risk establishments with a pioneering and tailored payment processing solution that allows them to flourish. Having decades of knowledge in the financial services and debt recovery industries, he ensures every client receives the same level of expertise, resourcefulness, and strategic vision no matter the size of the organization. Always willing to push the envelope, Chad’s forward-thinking and leadership skills are responsible for Payment Savvy being on the map as an industry-leading payment processor.


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