Is positive cashflow on your Christmas list?

With many businesses closing for Christmas (some for up to 2 weeks) it is important to plan ahead to avoid putting stress on your cashflow.

Talk to your major customers and find out what their opening hours are. If payments from them are due during a period in which they are closed, attempt to negotiate earlier payment dates. Knowing when your customers are not around, will also avoid you wasting time chasing payment when they are closed.

No matter how busy you are, avoid getting behind with your own invoicing and ensure that you follow your own account opening procedures. Be aware that new customers seeking large credit facilities over the Christmas period may well have exceeded credit limits elsewhere and be hunting for credit from unsuspecting (and busy) suppliers.

Do not supply new goods or services to a customer that has exceeded their credit limit and do not let credit limits get out of hand because of arrears with payments over the festive period.

Take action on those accounts that are beyond credit limits now. Do not wait until the New Year when your debtors will have other pressures, chase for payment now.

Plan and budget your own expenditure over this period because, inevitably, payment terms can be disrupted over December and early January.

Review your terms and conditions and credit policies during quiet periods to make sure you start the New Year in the best possible shape to increase your cash flow and avoid bad debts.

Stick to the rules and your Xmas spirit will not be dampened.