Beat the christmas cash flow blues by planning ahead

For many business owners, the Christmas-summer holiday is a four-to-five-week break from business as usual.

This lengthy period of irregular cash flow highlights a problem many small businesses already have — lack of money to see them through quiet times, says Paul Pettit of Deloitte Private.

He outlines three common problems small business owners face at this time of year:

  1. Not receiving the cash needed to cover all the payments you need to make over the summer break. 
  2. Staff who manage your cash flow are often on holiday. 
  3. Your banking facilities, eg overdraft, may be alright for normal trading, but won’t cover the whole holiday period. 

What to do

The two areas to tackle are your receipts and payments.

  1. Get paid promptly
    Get December and January invoices out early — and well before Christmas,” Pettit says. That gives your customers time to pay, but also there’s no excuse for them not paying on time. “You should also agree with your customers that they’ll pay before Christmas if they’re closing down for the holiday season.”

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