For some small businesses the looming Christmas period can be a difficult time of year, as certain industry sectors suffer a decrease in sales and if you add late paying customers to the mix, cash flow can get very tight.
We’ve come up with a few tips to help improve your cash flow during this festive period.
1) Budget and Forecasts
Make sure you create a cash flow forecast for the months leading up to and after Christmas (if you don’t have one already). Include those expenses which could arise and plan for paying staff early and reduced trading days.
2) Can it Wait?
Try to put off any unnecessary spending during these months such as building repairs, which can wait until cash flow has improved.
3) Get Paid!
Are your customers meeting your payment terms? If you have any overdue accounts these could worsen at the end of the year meaning payment is delayed for even longer. Remember these customers are holding onto your money. Proper credit control processes at this time of year are very important and if you think you may need some additional support, please contact us and we can talk to you about the options- a 3 month trial of our credit control could help over the festive period.
4) Customer Relationships
Keep your customers informed of what your business plans are over the Christmas period. As some businesses close over this time, try to get included in any early payment runs as you certainly want to be paid before they close. Having a good relationship is crucial to ensure your invoices get paid and hopefully on time.
Managing the cash flow of your business is critical at any time of the year, but at the end of the year it is very important to have certain plans in place.
If you are on top of your cash flow you will be in a good position during the holiday period which will help you in the New Year and beyond and while cash flow at Christmas may not leave you feeling particularly festive, it can be a quiet time and a good point in the year to plan ahead.
If you would like to increase your cash flow at Christmas call us today on 01908 268888 or contact us here.