Holiday cashflow for your business
Whether you’re heading into a holiday period, or just planning to take a break (and congratulations, because a healthy business means work-life balance), it’s important to keep your cashflow under control. This means pre-planning and being proactive.
When you’re not in the office, there are still overheads and salaries that need to be sorted. If taking time off means that less cash will be coming in, it’s essential to plan for this period to make sure that these costs can be comfortably covered. Make sure you have a clear picture of your payroll, and any other planned expenses that will need to be accounted for.
If there’s even a possibility that there could be a shortfall, it’s essential to meet this head-on. Whether this means talking to your supplier or creditors to figure out an arrangement, or compromising on other business outgoings, you must make a plan to ensure that the business, or your staff, won’t suffer.
Tips to minimise the stress of cash-flow over the holiday period
Sending out invoices promptly is your first line of defense. Consider going a step further by offering early payment incentives or exploring retainer agreements with regular clients. This ensures a steady inflow of cash before the holiday rush begins.
Building strong relationships with clients is paramount. Take advantage of this season to initiate open conversations about outstanding payments. A friendly reminder can make a significant difference, fostering goodwill and ensuring your business is on solid financial ground.
Talk to suppliers
A transparent relationship with suppliers is invaluable. Engage in open discussions about your cash-flow concerns and explore the possibility of extending credit terms. Most suppliers appreciate honesty and may be willing to accommodate your needs to maintain a long-term partnership.
Review your costs
Business costs have a tendency to accumulate gradually. Regularly reviewing expenses is a prudent practice irrespective of the holiday season. Take a comprehensive look at subscriptions, regular payments, and upcoming expenses. Identifying areas where costs can be optimised ensures financial stability throughout the year.
Explore alternative approaches
This is an opportune time to reassess your approach to travel, functions, and purchases. Are there cost-effective alternatives or adjustments that can be made without compromising quality? Being flexible and creative in your spending can contribute significantly to maintaining a healthy cash flow.
Talk to the bank or tax department
In times of tight cash flow, initiating early conversations with your bank or tax department is crucial. Discussing potential challenges in advance allows you to explore options, meaning you will have the necessary support to navigate any financial hurdles during the holiday season.
Preparation is key
All businesses need a holistic approach to tackle cash-flow challenges. Develop a comprehensive plan that encompasses all aspects of your financial landscape, from client interactions to supplier relationships and internal cost management.
This time of year can be hard on businesses. By implementing these strategies and staying proactive, you can not only minimise cash-flow challenges but also position your business for success in the coming year.