Christmas is the most awaited time of the year. Not just because of the festive and merry vibe everywhere, but because it is also the time that we can relax due to the long holiday break. However, that long holiday break may not be a good thing for some businesses as it means an irregular period of cash flow.
Businesses might close for a few days or even weeks during this time - but it doesn't mean that their expenses stop. There are still business expenses that occur while your business is on a break.
Some of the cash flow woes that small and medium sized businesses experience over this season include insufficient funds to cover expenses over the summer break and the employees who are responsible for managing your cash flow, accounts receivable and other financial affairs are on holiday.
So how do you beat these cash flow problems while enjoying the rest of the holiday?
Here are some simple cash flow management tips that you need to do to have a worry-free holiday season:
Tip #1 - Plan ahead
Analyse your current finances. Check if you have enough money to cover all your outgoings. Consider things like tax bills, capital expenditure and changes to sales, among others. Once you analyse your finances, proceed with strategic planning. Identify what you need to do or where you can find the money to pay all the bills. If you are having a hard time planning for this season, you should talk to your trusted business advisor.
Tip #2 - Get paid early
Send early invoices to your clients. Remind them of their December and January invoices. Most likely, your clients will be busy and may be distracted, so make sure to remind them before they close for the season.
Tip #3 - Get help from your staff
You can require some of your employees to work during the holiday season. No need to ask your whole team. Just ask those who can help keep things running to work during this period. They may be happy to take their holiday at another time. You may want to offer these employees an extra bonus for this.
Tip #4 - Get extra funds
If you think that you won 't have enough money to cover the holiday period, obtain extra funding such as a temporary overdraft before the holiday starts.
These are just some of the things that you need to consider if you are caught in cash flow strife this season. If you are unsure of the best way to manage this period, please contact us for an appointment.
We have expert business advisors that can help you with business strategy and planning to make your business running smoothly even at this time of the year. Also, as a trusted accounting firm in Auckland, we offer accounting services like tax returns, annual accounts, GST, and other small business accounting services to support your business.
We also have chartered accountants who are very skilled in using the best accounting software in NZ.
If you need help, contact us on (09) 576 4166. You are also a click away by setting up an online appointment here.
Photo source: https://travellerscarinsurance.co.nz/christmas-in-new-zealand/