4 Tips to Help You Manage Your Cash Flow Over the Holidays
Managing your business’ cash flow is hard enough as it is. Things become even more tricky during the holidays as people tend to adopt a more lax approach to business. To help you overcome this, we thought it would be useful to put together a brief article discussing how to best approach things during this time of the year. If this is something that you want to learn more about, read on as we list down four tips that will help you manage your cash flow over the holidays.
Stay on Top of Invoicing
It’s easy to let business administration slip during the holidays. This is normal as people are excited to enjoy their holidays after a tough year of hard work. However, it’s important that you understand that this time of the year is crucial and it should be when you stay on top of invoicing. Since some clients may be slow to pay, it would be best to be proactive when it comes to reminding them of their obligations.
Be Straightforward t with Your Customers
Over the Christmas period be clear with customers that you expect payment within the pre-arranged credit terms. A few days before payment is due, you should contact all of your slow payers to ensure that they will be paying on time. The phone is usually more effective than email; if you’re uncomfortable calling your customers, your bookkeeper may be able to assist.
Minimise Non-Essential Spending
You should reassess how you allocate your resources over the holidays. This is especially true if you expect business to deep during the holiday months. Indeed, businesses that experience a seasonal slowdown in December and January should examine their expenses to see if there is any spending that could wait until February or March when sales are likely to rebound.
While things like end-of-year celebrations and staff Christmas bonuses may be good for morale, these are common areas that many business owners do not plan for and can put them in a tough financial situation. To relieve this burden, you may wish to set up a regular fortnightly or monthly payment plan to contribute towards these costs throughout the rest of the year.
Tap Into Extra Funding
Due to the holiday season, many small businesses are facing cash flow issues. However, there are always more ingenious and creative ways to solve funding issues. If you're in need of capital, consider accessing a line of credit. Invoice finance can also help by paying off suppliers and putting your business back on track. Keep in mind that invoice finance is specifically designed to convert unpaid invoices into cash. These funds are best used to pay supplier accounts and other expenses associated with your day-to-day operations.
We hope this article proves to be useful when it comes to helping you manage your cash flow over the holidays. While it may seem difficult, it’s not something that you won’t be able to get through with enough preparation and dedication. Be sure to keep these tips in mid so that you can effectively manage your cashflow during the tail end of the year.
At New Wave Accounting, we take care of all your accounting and bookkeeping needs from start to finish. We have worked with over 600 small businesses across various industries. Our Gold Coast accountants have been able to get a thorough understanding of each sector and provide customised solutions for our customers as a result. If you're searching for a business accountant, we're here to help! Get in touch with us today and let us assist you in scaling and growing your company!