Christmas & Collections

Beat the Christmas Collection Crunch

B2B  |  3 min read

Ho, Ho, No!

If you’re a small business owner (with the possible exception of retailers) or an AR Manager, you know EXACTLY what I’m talking about. December can be the most distressful time of the year. 

On top of the standard holiday pressures, it’s the very shortest work month. Many companies lose a week or more of productive time to holiday closures. And what’s more, staff are burning the candle at both ends, partying late, often arriving at less than their best and cutting out at every opportunity to sneak in some gift shopping.

Somehow, it’s also the month for corporate parties and holiday bonuses – so despite the reduced productivity, December overhead is usually higher than in other months. 

And because everyone in business is feeling a similar pinch, collecting debt in December tends to be incredibly difficult. Your customers may have their sights set on the new year, and already decided not to pay any bills until then, opting to take advantage of suppliers’ holiday goodwill. What’s a sleepless entrepreneur to do?

Here are 4 pieces of advice to get you through the holiday season, and start the new year right:

  1. Be Extra Proactive
    If you want to collect in December, you will need to work at it harder than during the rest of the year. Because so many companies are holding back payments to get themselves through the same dry patch, the money may in fact be available. If payment is due, then ask for it – and offer to pick up the cheque in person. Do so as early as possible, but don’t assume it is too late or feel guilty for looking after your own commitments.
  2. Bring a Little Enticement
    When offering to pick up the payment, mention that you also have a gift to drop off. Done tactfully, this will give you the leverage necessary to get paid ahead of others. If the payment is not ready, visit with the gift anyway. An opportunity to see the decision maker and infuse a little goodwill of your own can sometimes inspire a cheque to be stroked on the spot. Don’t be afraid to linger enough to make it slightly uncomfortable.
  3. Be Attuned
    Whether you’re placing a December phone call or dropping in personally with a gift, pay extra-careful attention to what you see and hear. If the company is in trouble, there will be warning signs, and a holiday visit can be a perfect guise for deeper probing. Does the AP person seem more worried than usual? Ask some questions to find out how their own receivables situation is looking. How are prospects for the New Year? Look for telltale fissures in the optimism.
  4. Prepare to Escalate
    If you discover the situation is more dire than you originally thought, it’s time to take action. Remember, this is money owed to you, and you have an obligation to enforce the terms of your business agreement, regardless of the time of year. Waiting is never the right choice. Come January, you’ll have lost precious time and may find yourself at the back of the line. That’s the worst place to be when there isn’t enough money to go around.

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 most of us have payroll to make – plus those bonuses! Be sure to use an ethical collection agency that can balance the delicate nature of collecting in December with the urgency of your needs.

Have a fantastic holiday season, and don’t hesitate to reach out if you have any questions or need deeper advice.

If your New Year’s resolution is to collect receivables more proactively, be sure to download my 10 free tips by clicking the button below!

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Brian Summerflet Author: Brian Summerfelt

President and CEO of MetCredit, Canada's top-performing consumer and commercial collection agency

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