Businesses are waking up to the importance of maintaining customer relationships and that’s fantastic! Good solid customer relationships translate into increased sales, lower marketing costs, and (my personal favorite) better A/R results.
But that introduces a new twist — how and when to ask for payment during the holidays. Keep your cash flow merry and bright by keeping your collection efforts strategic and well-timed this year.
Getting Paid During the Holidays — Without Being a Scrooge
Cash Flow Timing
When will your customers have cash? Consumers will pay on or shortly after payday. Fixed-income customers will be more likely to pay just after the beginning of the month. Small retailers stand a better chance of having cash available after Black Friday and in the weeks leading up to Christmas. Friday after Christmas and the 30th and 31st are good consumer paydays to focus efforts on, because at that point people are DONE with shopping and starting to contemplate catching up.
But look sharp, because there are forces pushing in the opposite direction as well. Larger companies are going to be holding on tight to cash until the end of the year to make their books look good. Consumers will not have money right after big shopping events such as Black Friday and Cyber Monday. Payday cash flow will evaporate quickly.
We’re all used to seeing the news around this time of year that traffic is intense, and DUI patrols are out in force. Why is that? Because no one is home. Traveling is a big deal this time of year, and folks are likely to be away from home and out of the office. How can you overcome that and connect with customers?
Focus on using email when billing corporate customers, who may be accessing it remotely while they’re out of town. You can use email to get in touch with consumers as well, but limit the content just as you would with voicemail to avoid third-party disclosure issues.
Want to avoid looking like a humbug? Time your written correspondence with an eye toward postal delays. If you mail bills or statements a week before Christmas, you run the risk of it showing up the day beforehand. That bill is going straight into the recycling.
Boxing Day (December 26th) is a great day for getting a bill. People are coming back home, emerging from tryptophan overdoses, and out returning loud neckties. They’re checking their mailbox and clearing their inbox. There’s a reason large retailers like to have after-Christmas sales on the 26th — because people have cash and gift cards in their pockets and are in the mindframe to spend. The 26th through the 31st is a great time to collect without stomping out anyone’s holiday cheer.
Don’t underestimate the power of the New Year to free up cash as well. Larger companies are working in the next fiscal year and ready to clean up their Accounts Payable. Consumers may be making resolutions to clean up outstanding debts. Small businesses on the other hand may be cash-strapped for paying taxes, so don’t wait until the New Year to make the ask.
Above all, take a few minutes to sit down and make a plan. Who are your customers? When will they have money? When will you work on mail, email, and phone correspondence? Get these questions answered up front, and don’t worry about whether or not you’re getting it right later on. After all, you deserve to relax with your loved ones too.
Eric LaBrant authored the Getting Paid Starter Kit because businesses get paid more consistently when they’re less naughty and more nice. During a 2011 trip to the Arctic, he was able to visually confirm that Santa Claus does not live there, and that it’s possible to get an ice cream headache without the benefit of actual ice cream. His company, LaBrant Receivables, provides teaching and training to clients so they can get paid more quickly and consistently, without resorting to collection agencies.