Managing Christmas Cashflow
Whilst Christmas and the Christmas – New Year holiday period is often associated with joy, it can also be a time of great stress for some business operators.
The Christmas cash flow cycle is disrupted from the normal, due to slowing cash receipts, lower revenues caused by many industries slowing down, increased cash requirements for the payment of staff holidays and reduced staff productivity, with the conditions often lasting until Australia Day.
These circumstances are not new to businesses, but the better a business is prepared to manage the disrupted cash flow cycle, the better it will be for them and the less stress the business will suffer.
Some debt collection and cash management tips we offer are as follows:
- proactively manage debt collection, don’t let your debts outstanding be the ones that are endlessly delayed.
- keep invoicing in the lead up to Christmas to ensure your accounts are at the top of the payment priorities in January.
- consider prompting part payments (two payments are better than no payments) or a seasonal discount for prompt full payment in December.
- plan ahead and retain a cash buffer or headroom in banking facilities to weather the slower payment expectations.
- reduce or defer non-essential expenditure.
We are always happy to assist businesses with advice on the management of cash flow problems and offer a no-obligation initial meeting to help businesses explore turnaround and restructuring options.