Holidays and Vacations for Accounting Staff
During the summer months, more than half of Americans take days off. During this time, collections may slow down while your customers’ accounting staff is on vacation. This phenomenon works in the other direction as well – customer payments can be delayed or slow down when your own collectors are out of the office.
One simple way to avoid this seasonal slowdown in collections is to make sure you have multiple A/P contacts with your customers. That way if your primary contact is out on vacation, you have a backup to get in touch with and continue the communication and invoice payment process without interruption. In some cases, it turns out there is only one single contact – but it never hurts to ask your primary contact who you should follow up with when they are out of the office.
Planning and Communicating During Holidays
So it's no surprise that customers will be less willing to answer the phone, reply to email, or simply work with you on the days immediately prior to and following a holiday. The tendency is to want to leave the office with an empty task list and then have some time upon returning to complete new tasks that accumulated while away. Therefore, getting in touch well before the holiday or waiting at least 2-3 days following will give them time to catch up, clear their mind, and offer you their full attention.
See Also: AR Collections Lessons From a 5-Year Old
When your collectors go on vacation or are away for the holidays, make sure you have a documented plan for handling collections in their absence. At companies with multiple collectors, consider temporarily assigning accounts to another staff member. With only one collector, designate his or her temporary replacement and make sure they have the training and resources available to get the job done effectively as well as make the transition hassle-free for your customers.
Business Cycles and Cash Flow
Typically the worst period of cash flow for a seasonal business is 1-2 months before their high season. That’s because they’ve experienced a low level of sales for the previous months and are likely building up inventory (and using up cash) for the coming high season.
See Also: 3 Ways Credit Managers Can Beat Bad Debt
Less Obvious Seasonal Factors
Do you have customers that attend multiple trade shows? Are those trade shows scheduled around the same time every year? If so, this may slow down payment because the A/P person or check signer is out of town or working on trade show projects. That’s why it’s important to keep up with your customer’s news and activities. A good way to do that is subscribe to their newsletter, follow their accounts on social media, and keep a pulse on what’s happening in their business.
Tracking Payment Trends
How to Collect On-Time, Every Time
Collect-IT is accounts receivable and credit collections management software for Sage 100 that tracks, manages, and reports on all the A/R information that could otherwise fall through the cracks.
Collect-IT is great for seasonal collections because it includes critical tools and features like multiple collections contacts, unlimited customer collections strategies, automated payment reminders, detailed notes and custom fields, and a complete audit trail of all communication and steps taken to collection on accounts receivable invoices.
Guest Post by Dynavistics, Inc.
This article was provided by Dynavistics, Inc.
The company's innovative add-on software solutions - like Collect-IT - will transform your “I wish I could” into “I know we can” by enhancing your existing ERP software so it's capable of doing more than you ever thought possible.
Their solutions for wholesale distribution, A/R collections, delivery management, and more integrate with popular ERP applications including Sage and Microsoft Dynamics.