Cashflow at Christmas
Many businesses close their offices for a period of time over the festive season and for small businesses in particular this can cause a cashflow crisis.
The usual costs, such as wages and rent etc still have to be paid, yet with staff away for the festive season the billing and cash intake may not be either as high or as quick as usual.
So how do you get around this?
Planning and forecasting is the answer.
- Keeping your bookkeeping up to date
- Having an automated accounting software can help by sending statements as soon as the money is due – even if you are not there to process it.
· Consider your payment terms and whether you can reduce them
- Maybe ask for a deposit from customers up front (especially for larger orders)
· Have a good debt collection process in place and consider penalties for late payments.
- There is always the options to consider short-term and long-term financing as well.
- Accept credit card payments
- Outsource cost effective work areas
- Complete a cashflow forecast on a rolling 12 weekly basis – ensuring you are up to date on an ongoing basis as to your cash position
And cash flow isn’t just about the money you’re receiving, it’s also about the money you’re paying out.
Make sure you have a process in place to itemise your outlays and the exact dates they’ll be paid to ensure you have a handle on your budget.
- Maybe negotiate different payment dates with your suppliers so they are not all coming out at the same time.
Remember: Planning, Forecasting and Good Debt Collection Process….is not just for Christmas – it should be managed all year round!
For more help on cashflow forecasting please do contact Victoria on 01473 558866 / email: email@example.com
Disclaimer:- The information contained herein is given by way of general guidance only and no action should be taken solely on the basis of the information contained herein. The Avanti Group (UK) Ltd will be pleased to provide further guidance on the issues, and how they might affect you. No liability is accepted by the firm for any action taken without seeking appropriate professional advice
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