Cash flow must not take a break

Dalby Herald - - NEWS -

AS WE head into the Christ­mas hol­i­day sea­son you are most likely look­ing for­ward to some re­lax­ing times ahead, but one thing that should not be tak­ing a break is your cash flow.

It can be all too easy in the busy lead-up to Christ­mas to let chas­ing bad debts and in­voic­ing clients take a back seat. But if you don’t act now, you may not see any cash un­til Fe­bru­ary.

Mean­while your reg­u­lar bills will still be com­ing in and wages will also need to be paid.

So what can you do to make the hol­i­day sea­son fi­nan­cially stress free for your busi­ness?

Main­tain­ing cash flow is key to suc­cess­fully nav­i­gat­ing the hol­i­day pe­riod.

So ahead of Christ­mas, make sure you chase out­stand­ing debts and all of your cur­rent in­voices go out well be­fore busi­nesses close for the Christ­mas break.

One strat­egy might be to put in place easy pay­ment meth­ods for your debtors such as BPAY or Paypal.

The more op­tions you give cus­tomers to pay, the more likely you will re­ceive prompt pay­ment.

You could also con­sider of­fer­ing a dis­count for early pay­ment be­fore the hol­i­day pe­riod starts or re­duce your terms from 30 to 21 days.

If you have large debtors, don’t be afraid to com­mu­ni­cate with them about the tim­ing of their pay­ments.

To boost in­come, con­sider rolling out a clever mar­ket­ing cam­paign for your prod­uct in the run-up to Christ­mas.

The ex­tra money may counter a quiet Jan­uary.

If you have slow-mov­ing stock, you may also need to think about dis­count­ing it to raise funds?

Al­ways be care­ful not to dis­count too much or too of­ten, or cus­tomers can be­come hes­i­tant to pay full price, but a once off sale to move stock could be help­ful.

Check out your in­ven­tory lev­els and maybe con­sider can­celling your Jan­uary de­liv­ery if sales will be low.

The key to man­ag­ing your cash flow is start­ing with a good bud­get.

If you know the pat­tern of your an­nual ex­pen­di­ture and in­come, then you will be able to recog­nise the pe­ri­ods when you may strug­gle and plan ac­cord­ingly.

PHOTO: CON­TRIB­UTED

BMO ac­coun­tant Tom Hall.

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