Experts have been debating about a U.S. recession for almost a year now, and thanks to not being an official announcement yet, it seems that the discussion will carry on. Nonetheless, most analysts indicate that 2023 will finally be the year it unleashes.

We’ve put together a 4-step plan that, if followed through, will give you the highest chances of surviving a recession as a debt collections team.

1. Prioritize Debtors Accurately

A bulls-eye recreating how to prioritie debt collectors

The ability to prioritize debtors accurately is critical for any debt collections team during a recession.

As many businesses struggle to stay afloat and maintain liquidity, resulting in fewer resources available for repayments of outstanding debts, prioritizing which creditors to pursue in an economic downturn is what will define the survival chances your business has.

But how can you know which debtors you should focus on?

Here are 4 steps you can apply to your decision-making process in order to make the statistically right choice:

1. Analyze the debtor's ability to pay: Consider their income, assets, and payment history, and take into account any extenuating circumstances that could affect their ability to pay on time, such as job loss or medical concerns.

2. Estimate potential recovery rates: Once you have a good sense of the debtor's financial status, utilize it along with historical data from your business to determine how probable it is that you will be able to recover the debt.

3. Set priorities based on debt age: Another key consideration when evaluating loans is their age. In general, older debts are a greater priority since they are less likely to be paid back at all, but newer debts still have some potential for recovery before going into default. 

4. Rank debts by total value owed: Finally, rank debts according to total value owed so you know which ones offer up the biggest bang for your buck when it comes time for aggressive collection efforts like legal action and garnishments.

Focusing your team on the debtors that have higher chances of paying their loans back on time will help you save time and resources, which is crucial in order to put your company on track to outlive a recession. 

2. Set up Automated Collections

Robot arms representing automated det collection

Surviving an economic downturn is all about efficiency: lowering costs and getting as much value as possible from every recovery attempt. Automation is a great way of achieving this. 

Automating your collection process means taking advantage of powerful technologies such as analytics software, artificial intelligence (AI), machine learning, robotic process automation (RPA), and customer relationship management systems (CRMs), to take care of the repetitive, labor-intensive tasks associated with collections like locating contact information, sending out payment reminders or dunning notices, monitoring payment history, tracking payments across different channels, understanding customer behavior patterns, and more.

Since it will take care of all repetitive tasks, it reduces the need for manual efforts on the part of your agents, freeing them up to focus their time and energies on more challenging assignments like negotiating settlements or tracking down difficult-to-locate assets from elusive borrowers.

Automated collections are also more accurate and faster to respond than manual processes. This means you'll be able to rapidly identify which accounts require attention and prioritize them accordingly, ensuring that no account falls through the cracks when resources are short and budgets are severely constrained.

Automated recoveries are a powerful tool that has been proven time and again to increase efficiency, save operating costs, improve customer satisfaction, and ultimately help businesses in getting back on track financially, especially during times of financial instability.

3. Develop an overdue payments procedure

An overdue payment procedure

Many businesses will go under during a recession and, as a consequence, overdue payments will tend to increase. Having a clear guide on how to collect the dues will improve efficiency as it will save your team from getting stuck in every specific situation trying to figure out how’s the best way of handling it.

The overdue payment procedure you develop will depend on the way you run your business, but it should look something like this:

  1. First contact (Pre-due date): Send an email/SMS 5 days before a payment turns overdue, stating the benefits of paying on time.
  2. Second Contact (Due Date): Send another notice the day the payment is due. 
  3. Third contact (7 - 10 days from the due date): Send a friendly reminder and cut the debtor a deal by telling him that if he pays that same day, no late payment fees will be added.
  4. Fourth contact (20-25 days after the due date): Send another payment reminder, with a direct, but polite tone. Remind them that, as they didn’t accept the deal on the last contact, now fees and interests will be charged, and will keep stacking up the more they wait to pay.
  5. Fifth and final contact (35-45 days after the due date): Make direct contact with the consumer to identify any obstacles that are keeping them from making a payment and to devise a solution. If you can find a solution, you will be able to create a personal relationship with them, which will improve client satisfaction. If the debtor is not able to keep up with the arranged contract, offer the possibility to refinance.
  6. Derivate to a Collections Agency: If none of the contact opportunities above work, consider deriving the debtor to a collections agency. Your decision will depend solely on the previous debtor’s prioritization you should’ve done.

All of these interactions can be automated through a platform like Resolve, where you can create personalized payment plans, refinances, and gateways for each debtor and message you send.

4. Step up your digital game

Mobile payments and conversational commerce used for debt collection

In a world where 83.32% of its population have smartphones, 79% of them made a purchase with it, and Mobile Wallets have +3.4 billion active users, the fact that your business needs to step up their mobile experience game isn’t a discussion anymore.

Mobile Payments are taking the space by storm as they offer a faster, more convenient, easier, more personalized, more flexible, and more secure way of making payments.

Incorporating mobile payments into your recovery efforts through QR codes, payment links, or contactless payments is a great way of reducing a lot of friction from the payment process. At the same time, it will let you speak in the same terms as the younger generations of borrowers like Millenials and Gen Z.

Setting up a robust mobile payment structure to leave debtors with no excuses to pay is not only the best bet for surviving a recession but for the long-term success of your business.


A recession is a period of fear, uncertainty, and scarcity. Outliving it is all about thinking smart, acting fast, and sticking to the plan.

If you focus your determination on completing the four steps stated above, you’ll not only have the best chances of surviving a recession as a debt collections team, but making a killing out of it.