With Christmas right around the corner, it can be a tricky time in terms of managing cash flow.
During the festive season, many SMEs are at their busiest, but it’s a time that also puts a strain on resources and cash flow.
To ensure your business remains in good shape over the holiday period, here are our top three tips for managing cash flow and collecting debts over Christmas and the new year…
Review your invoicing practices and take into account when other businesses are closing
It’s important to review your invoicing processes in the lead up to the holiday period and check when clients are closing so you can ensure you’re paid on time.
It’s also a good idea to review which clients are often late in paying, so you can schedule reminders to ensure you’re paid promptly.
If you’re only thinking about this now, it might be a little late to completely overhaul your invoicing schedule, but you can ensure you know when your clients are closing for the Christmas break so you can get your invoice in (and paid) on time.
Refer any unpaid invoices to a debt collector if necessary, or lock in bad debt protection in advance
If you have any unpaid debts, it could be pertinent to refer them to a debt collector.
It also could be a good idea to consider putting bad debt protection in place.
This can provide peace of mind during periods where there are a lot of public holidays – such as the festive season – which can blow out the usual payment terms.
Consider offering a discount for early payment
Consider offering clients an incentive for making payment early. This will encourage clients to pay you in advance.
It’s also a good idea to approach your suppliers about what discounts they can provide you with for early payment.
If you’re looking for more information around managing your cash flow over busy periods, talk to your MWM Advisory accountant. Call 5596 9070 today.
