Tax season collections bring good tidings to organizations with a solid tax season strategy. Over the next few weeks, the IRS will announce the date it will begin accepting 2017 electronic tax returns (typically mid-January), marking the official launch of the 2018 tax season. To maximize collection results from February to May, U.S. businesses with accounts receivable are advised to sign with a best-in-class debt collection agency prior to tax season.
Consumer Tax Refund Spending Patterns
For the 2016 fiscal year, the IRS issued 97 million tax refunds each worth an average of $2,763, totaling $268.3 billion. According to the National Retail Federation (NRF) 2017 Annual Tax Returns Survey, 66 percent of consumers expect a tax refund, but how those respondents anticipate using the money varies dramatically:
- 48 percent plan to place the funds in savings accounts.
- 35.5 percent plan to pay down debt.
- 20.9 percent intend to use the funds for everyday expenses.
- 10.7 percent will use the money for vacations.
- 8.7 percent will spend the returns on major purchases.
- 7.6 percent will “splurge”.
Maximize Tax Season Collections Results
Contacting delinquent consumers during tax season is crucial. Regardless of their intentions for applying tax refunds, individuals are more receptive to collection efforts during the four-month period due to increased holdings.
With over one third of consumers expressing interest in paying down debt, the question is not a matter of “Do they want to pay?” but rather, “Who will they pay first?”
Best-in-class debt collection agencies operate with extensive industry knowledge and experience to produce an effective tax season debt collection strategy, and they are committed to making sure their clients get paid first.
Collection methods involve, but are not limited to, monitoring consumer trends and economic factors, remaining compliant, conducting consumer outreach, instructing collections staff, preparing call centers to handle an increase in calls and timely adjustments from management when factors change.
The Optio Advantage
Managing in-house tax season collections while conducting routine business activities can prove challenging and unsuccessful for businesses. Partnering with a quality agency allows organizations to remain focused on production and sales instead of delinquent accounts.
At Optio Solutions, our agency is committed to recovering debt and maximizing return on investment for clients. Optio operates with a legal team and ACA certified Credit and Collection Compliance Officers to remain compliant with all laws governing collections. In addition, Optio advocates for clients using advanced technology while safeguarding consumer data with advanced security systems. Furthermore, our agency maintains brand protection and customer retention using a consumer-centric approach that includes consumer satisfaction surveys.
Organizations interested in increasing debt collection ROI by 20 – 30 percent during the tax season can entrust our agency to deliver quality service and desirable results. Our agency expertly assists business in a variety of industries year-round with our first-party, third-party and tax season collections strategies. Contact us today to learn how Optio can assist your business.