Managing Cash Flow at Christmas
The festive season can be a challenging time for many businesses, particularly as a service based business, you will probably be bracing yourself for a quiet month in January. It’s also around this time that spending and splurging is unavoidable with Christmas parties, client gifts and staff bonuses clearing out the cash tank.
Here are some business accounting tips to help you see through the silly season and avoid January bookkeeping blues.
1. Send out invoices quickly, be proactive with your invoicing. If your normal process is to wait until the end of the month, try doing it at the end of each job until Christmas.
2. Reduce spend now where you can to save up for the slower period.
Use last year’s projections to help. Xero gives you an instant snapshot of your incomings and outgoings. Then prioritise the bills you need to pay.
3. Chase late payments. Approach customers who are traditionally late payers to ensure they have received your invoice and are ready to process the payment. If they have cash flow problems, get them to pay at least part of the debt. Some cash is better than none. Alternatively, if you find you’re busy during the end of November and the start of December as everyone wants it done before the end of the year, consider getting us to help collect your debts.
5. Don’t raid the tax piggy bank. Your provisional tax and GST may fall on the 15th of January, so you’ll need the funds to cover it. But if you think paying provisional tax will be a problem, talk to Inland revenue before then.
We offer accounting knowledge at bookkeeping prices so we can help you with managing your payments, invoicing and even your financial statements. To find out more give us a call on 033795338.