Every year around this time, people stress about getting their taxes done by the deadline, and tax accountants go into overdrive to get their clients’ returns processed on time.

Those who are fortunate enough to get a refund face one significant question — what to do with that refund?

For many organizations, including those in the accounts receivable management (ARM) industry, having customers pay off debt with their refunds sounds like a splendid idea. But convincing customers to part with their newly acquired money in such a pedestrian way isn’t easy. So organizations must be ready to communicate effectively with consumers to convince them to spend their money in this manner. After all, there isn’t a better time to collect than when customers have money available to pay off their debt.

To splurge or not to splurge

People do a host of different things with their tax refunds. The most common narrative is that people will splurge on a large purchase (such as a new TV or a new car) or a luxurious vacation. In actuality, people often use their refunds for more practical purposes.

According to one report, approximately 21% of people will use their refund to pay bills, while another 19% will pay down their debt. This practical approach to tax refunds is even more common when looking at numbers provided by the National Retail Federation, which reported that one-third of people are planning to use their refund to pay down their debt with another 28% using it on everyday expenses, such as bills.

Whatever the actual number, the fact remains — people are open to using their tax refunds in a more responsible manner. And organizations must take advantage of this.

Meet consumers where they are

Organizations understand the importance of knowing their customers and personalizing the customer journey. Using a generalized approach that treats all consumers the same way limits an organization’s chance of success. Instead, personalized communication tactics are more likely to resonate with consumers, leading to better results and a greater chance customers will use their refund to pay their debt.

Much of this personalization focuses on consumers’ use of digital channels for practically everything. Many businesses are already taking advantage of consumers’ current obsession with everything digital. According to a recent survey of U.S. consumers, say they think paying online is secure, while only 47% and 34% say mailing a check or paying over the phone is secure, respectively. In addition, 50% of consumers prefer to receive payment reminders via email, while 40% prefer to receive bills and statements via email.

Since consumers have shown they are comfortable with digital channels, it makes sense to let them use those same digital channels to make payments.

Customers will appreciate the convenience of digital payments, being able to determine when and where they can make a payment, even from their phone. For example, that same survey revealed that 65 percent of consumers prefer to pay regular monthly bills online.

Customers also appreciate being able to schedule a date and time for ongoing payments. These behaviors save time and make the unpleasant task of making payments a bit more convenient, which has the added benefit of reducing the number of late payments.

However, organizations must be equipped with technology that allows them to communicate with consumers in the way they prefer and allows them to pay in the way they prefer.

Going digital

It’s more important than ever for organizations to embrace digital technology. This is a critical step to improve communications with customers and give them the payment options they want. Organizations must invest in omnichannel communications, such as adding email and text to their existing phone and letter efforts, to better engage with consumers.

And it is past time to add online payments to make it easy, safe and convenient for consumers to pay. In addition to providing online payment options, organizations must also provide the flexibility of online payment plans with recurring payments.

A new certainty

Benjamin Franklin once said: “In this world nothing can be said to be certain, except death and taxes.” Filing your tax returns is a certainty this time of year. But getting a refund isn’t. Those who do get a refund can use that money in a variety of ways. And organizations in the ARM industry must use technology to ensure that customers paying off their debt with their refunds becomes another certainty this time of year.