Protecting Your Cash Flow This Christmas

Christmas is a wonderful time, full of tinsel and food and family. But for business owners, it’s also a cause of stress. Not only do many have to close down over Christmas for at least a few days, and cash flow often gets extremely stretched. And while this is relatively normal, it can also have some knock-on effects that can be difficult to overcome. The good news is, tackling the issue of festive cash flow head on can help you start the new year in a much stronger position. Today we share some of our top credit management tips to help ease the strain of Christmas cash flow this year.

Don’t Forget the Early Christmas Shutdown

This might seem a little silly, but it’s important to remember that December isn’t a full working month. Most businesses will shut at least a week before the end of December, and some might even shut as early as 2 weeks. So while in the normal run of things accounts payable teams will set up their months payment run in the last few days of the month, they will be looking to do it much earlier in the month, or leave your invoice until the New Year. That means that if you want to be paid on time, you need to be on top of things. To make sure you get in on that December payment run:

• Send your invoices over as early as possible
• Include a full statement of all outstanding invoices
• Make sure your payment terms and due dates are crystal clear
• Make it clear that you expect payment before Santa arrives

Be Persistent with Payments

We know the last thing you want to do is badger people for money near Christmas, but that doesn’t mean you should stop perusing payments altogether. Make sure you’re keeping in regular contact on the phone and via email, and don’t let payment schedules slip because of the holiday season. Never be too demanding, but make sure your customers know you are expecting prompt payment, and will pursue any payments missed before the Christmas shutdown. If you do this well, a customer will often pay the invoice for no other reason than to stop receiving your calls and reminders!

Take Action Now

If you still have debts on the books that are already outstanding, now is the time to take action on them. If you wait until the new year, you may find your debtors have a lot of other pressures that push you further and further down the payment queue. After all, the only time of year harder on the business wallet than Christmas is January. If you’ve been struggling to get those clients to pay up, hiring a debt collector can be helpful, and often gives them the nudge they need. It can also free up time for your employees while their resources are stretched over the festive season.

Practice What You Preach

Christmas is tough on everyone’s wallets, but don’t let it make you fall behind on your own payments. After all, you don’t want to start the New Year with debts that could have been avoided. Sit down and analyse your own cash flow, putting provisions in place to make sure you can pay all of your invoices. If you need cash flow solutions, seek them out now, as his helps bridge the gap between providing a service and being paid that can get even longer during the Christmas period.

At Debtcol, we see customers struggling with seasonal non-payment every year. It’s something very stressful, but it really doesn’t have to be. With the right preventative steps, Christmas can become the least stressful time of year for your business. If you would like to find out more, or ask any questions about how we could help, just get in touch with us today for your free consultation.