Don’t let December catch you off guard
As the year winds down, many small businesses start to relax.. but your cashflow shouldn’t! December often brings reduced trading days, employee leave payouts and ongoing expenses that don’t take holidays (think rent, utilities, subscriptions and loan repayments).
Now’s the time to plan ahead so your business stays steady while you (and your team) take a well earned break.
Review your December and January cashflow forecast
Look ahead at your expected income and expenses for the next two months. Consider that your usual customer payments might slow down as clients shut down for the holidays. Build a simple cashflow forecast to identify any gaps and make sure you’ll have enough funds to cover regular commitments. If cash looks tight, speak with suppliers early - you might be able to adjust payment dates or set up short term options to smooth things out.
Set aside funds for staff leave and holiday pay
If you have employees taking annual leave, remember you’ll still need to pay them while they’re away and possibly pay public holiday loadings or leave loading on top. Check everyone’s planned time off and estimate the total leave payments due in December and January. Transferring this amount into a separate “holiday pay” account can make it easier to manage when those payments fall due.
Chase up overdue invoices before clients switch off for the year
November is the perfect time to tidy up your accounts receivable. Send friendly reminders to customers with outstanding balances - many businesses finalise their books before Christmas and are happy to clear their debts now. Collecting what’s owed to you before the holiday slowdown can make a big difference to your end of year cashflow.
Check supplier cutoff dates for payments and deliveries
Many suppliers close earlier than usual in December or run with a skeleton staff. Make sure you know their deadlines for orders, deliveries and payments - especially if you rely on them for stock or materials. Getting organised early avoids last minute disruptions and ensures you have what you need to keep things running smoothly in the new year.
A little preparation in November can help you enjoy a stress free break, confident your cashflow is under control and your team is looked after. Start now and you’ll roll into January refreshed.. not playing financial catchup.
This information is intended to be general in nature and is not personal financial advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided in relation to your own circumstances.
