Will Your Cash Flow Survive Christmas This Year?

Christmas is a wonderful time of year. Everyone is full of nostalgia and Christmas spirit, gets to enjoy some well-earned time off work and spend it relaxing with their families, eating and drinking too much. But for business owners it can also be a bit stressful. Particularly because it can make your cash flow unpredictable. Some businesses will find they hit a surge, while others will struggle with late payments and inconvenient big bills. But with a little planning and strategy, your business cash flow can survive Christmas, and even be healthier on the other side.

Plan, Plan And Plan Again

Planning is the absolute key to surviving any fluctuation in business, whether it’s caused by something as regular as Christmas or something as out-of-the-ordinary as Brexit and the fall out of the recent election. There is no substitute for making the effort to plan. This means putting together a cash flow forecast for your business, being as careful and realistic as you can. If you’ve been running your business for a while then you can use previous years data as a basis, and then work from there. With a good cash flow forecast you can make plans to handle anything the season throws at you. If you know you’re going to experience a fluffy of business, you can hire extra staff, buy extra stock or increase your marketing efforts. If you know you’re going to experience a dip, you can look at areas to cut back on and increase your marketing to draw in extra income.

Anticipate Late Payments

The holidays are a hectic time, with all of us suddenly having a lot of extra plates to keep spinning. As business owners everywhere work to keep up, there are some things that will inevitably get missed. One of those is often payments to suppliers – including you. Try not to get too worked up about it at this time of year – and instead make sure you have planned for some late payments. If you can, build in a buffer that will cover your expenses when the late payments hit, so that you aren’t caught off guard.

Control All Spending

If you’re anticipating a dip in income, the best thing you can do is limit your outgoings as much as possible. So it’s time to look at your finances and see if there are any ways you can manage or reduce spend, just for the Christmas period. Are there any unnecessary things you’re spending on, or anything that could be postponed until the new year to relieve the cash pressure? If there is, put it on the back burner until late February, when the festive slump is ending, and you have more room to spend again.

Explore Your Funding Options

If part of your planning process reveals you need to buy stock in advance, or pay invoices before sales money comes in, then you might need to look at ways of funding that. If money is tight over Christmas (and don’t worry, it happens to all of us), you could look at external funding sources to remove some of the stress and worry. Even if it’s just a short-term loan that you pay back once sales pick up again – it could be all you need to provide a calm, happy Christmas.

If you’re struggling to get your payments collected and books closed out before Christmas, then it might be time to consider hiring a professional. Debt collection agencies like us can help you manage payments efficiently, ensuring you don’t get late payments and your cash flow behaves in exactly the way you expect it to. To find out more, just get in touch with us today.