Christmas is supposed to be the jolliest season of the year, where families come together, friends celebrate and everyone is merry. Unfortunately, it’s not always that easy, as many small business owners may very well know. Christmas is the period where productivity goes down, overheads go up and available cash flow often decreases as well. This can lead to considerable hardships for your business in the lead up to Christmas and the new year if not tackled appropriately. Instead of sitting there asking yourself about how to get clients to pay during the Christmas period, read on to see the best ways to go about collecting during the merry season .
Expect increased costs
It’s no secret that Christmas is an expensive period of the year at the best of times. You have to pay for holiday food, gifts and travel expenses as a beginning. And if you’re a business owner you probably also have to cover staff parties, holiday bonuses, staff expenses and time off. These are some pretty hefty extras and many businesses, especially SMBs, may struggle to cover them on top of their creditors’ invoices. Many businesses can find themselves in economic distress due to costs.
With all these extra expenses, there are going to be businesses and debtors out there that are going to prioritise other things ahead of your invoices and collections requests. While this is understandable, it can be a pain for the businesses and collectors involved. It’s understandable that you want your overdue invoices paid as soon as possible, but this is one period of the year where it will pay to be a little more forgiving. Aim to get those overdue invoices sorted as soon as possible. But if you can’t, set up a game plan to get them sorted after Christmas and New Years have released their strangleholds on many businesses finances.
Get those invoices sorted sooner rather than later
It’s important to make sure you keep up to date on your invoices. The longer you let them go unpaid, the less chance there is of getting them successfully resolved. If you’re offering credit to your clients, make sure you send invoices out to them in a timely fashion. You don’t want to be sitting at the bottom of the priority list of creditors to pay because you left sending your invoice too late!
The sooner you send out invoices, the better. Ideally get them sorted in November (if at all possible) but if you do have to send them in December, expect that there may be a delay in payment. For lots of small business, the jolly season is when expenses are put to the test.
Everyone’s wallets are going to be extremely tight over the festive season, and it’s quite typical that many will put off paying bills until after Christmas and New Years are done and dusted.
It’s also important to remember that not only are many businesses running on less staff, but they’re most likely extremely busy. It’s understandable that not everything will be firing on all cylinders. As such, expect to have to wait if you decide to send your invoices in a week before Christmas.
Susan from accounts is probably going to be on holidays and won’t be able to pay your invoices until she’s back. So, the key take away is, get your invoices in early to avoid the headache of unpaid accounts later. Keep in mind that many SMBs may shut up shop over the break, leaving emails unanswered and invoices unpaid.
Be understanding – no one wants to be known as the Christmas Grinch!
Christmas can be a tough period for many businesses. Managing cash flow at this time of year is going to be a struggle for many businesses and it’s been noted that many SMBs do not reopen their doors after the Christmas period. This doesn’t mean that your business should suffer though. Business can a cut-throat industry, so it’s only fair that you request your invoices be settled. Just keep in mind, it’s the merry season and for most businesses the busiest time of the year.
A good way to gauge how your fellow business owners are doing and also request payment at the same time is to send out your Christmas cards early. Or even better, drop them off in person if you’re able. Not only will it bring a bit of Christmas cheer and good-will, but you can inquire about business while you’re there. A simple “so, how are things going?” can tell you a lot about business health. Do they sound like they’re struggling? This could be a sign to request payment early. You may even be able to get your invoice settled while you’re there. Signing a quick cheque is a lot easier when they have the person standing in front of them and little excuse not to do so.
Whatever you do, don’t try and send any invoices or demands for payments on public holidays or Christmas itself. Not only will this look incredibly insensitive, but in some states it can even be against the law. If you absolutely must request payment, hold off a few days until businesses are back up and trading.
Didn’t manage to get your invoices settled before Christmas?
If you didn’t manage to get your invoices sorted before the Christmas rush, it may be time to come up with a game plan for the new year. Many businesses may still be feeling the Christmas pinch, but it will begin easing off after the sales have come to an end. It’s quite within reason to start following up on unpaid invoices. This is where you may also want to call in the pro’s and secure the expertise of professional debt collectors. Why not try Profcoll?
Professional Collection Services
Have you gotten to the point where you failed to receive repayment during the Christmas period? It is definitely worth getting in contact with a professional debt collection agency. While we all try to be understanding and forgiving, (after all it is the Christmas period) there’s only so far you can go before you need to get a bit of help. Unpaid invoices tend to be the unwelcome gifts that keep on giving. When cash flow is so imperative to a business’s health, it really does pay to get those unpaid invoices sorted as soon as possible.
This is where ProfColl can help. Our debt collections agency boasts over 23-years’ experience in the debt collection industry and with our hard-earned experience, we know a thing or two about preserving good business relationships. Don’t hold back for fear of burning bridges with your clients. If your business goes into insolvency due to poor cash flow, your clients won’t be worth much to you at all. When you put your trust in an experienced debt collection agency, you can preserve your good relationship and get your files sorted as well.
Help is on hand. Let us take on the hassle of hunting your unpaid debtors down so you can get back to doing what you do best – running your business.
Kick the New Year off right
If you don’t have an indemnity clause in your contracts already, we recommend getting in touch with us and including one in the future. With an indemnity clause included in your contracts, there is no reason for you not to follow up on unpaid invoices.
An indemnity clause will allow you to claim not only the money you’re owed but, if implemented correctly, any expenses you incur trying to claim the funds. This could include things like the commission required from your debt collection agency and legal fees.
Christmas spirit goes both ways
Don’t let unpaid invoices hurt your business. Get them sorted early or enlist the help of ProfColl if your bad debt just won’t get solved. Don’t forget, it’s the merry season. So, don’t let pesky debt collecting stop you from spreading a little of the Christmas spirit and pay your creditors early as well. Not only will they thank you for it, but your good deed could be the difference in them opening their doors again after Christmas. After all, cash flow really is key.
The next time you’re sitting there wondering “how do I get clients to pay?” or “how do I get overdue payments from clients?” look to ProfColl. We’re experts at getting your money back where it belongs in a professional, efficient manner.