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Over the Christmas period it is vital to closely monitor your business finances to avoid the all too familiar cash flow crisis. Many business owners experience challenges with their cash flow throughout the Christmas period due to varying factors, but this could be avoided with careful planning and budgeting.
Too often we see business owners ignoring their regular accounting processes and cash flow, choosing not to pay their finances attention until the New Year.
With these tips you will be able to effectively manage your cash flow and enjoy some time off during the holiday season.
Tip #1 – Plan and prepare
Creating a budget for your accounting needs will help you to forecast the finances of the business in preparation for the holiday season. The budget may require that you are proactive in chasing your invoices in the lead up to Christmas so that cash flow is sufficient. Prior planning can ensure peace of mind that shortfalls in cash flow can be reacted to and managed effectively.
Tip #2 – Invoice efficiently
If you are issuing invoices throughout the Christmas period, ensure to make this a quick process in order to receive payment promptly. It is a good idea to give friendly reminders about your business’ invoices so that they are paid as a priority, thus improving your cash flow in the New Year.
Tip #3 – Sharpen your accounting processes
The accounting processes used during the year should be adhered to especially in the lead up to Christmas. Administrative duties and paperwork can often be put aside to complete when businesses have spare time in the holidays, however this impacts negatively on cash flows. Delays in sending and chasing invoices will result in late payments in the New Year, leaving businesses struggling for cash to cover costs.
Careful planning and the upholding of all regular accounting processes is essential in maintaining a positive cash flow.
These strategies will ensure that the Christmas cash flow crunch is avoided, and business owners can relax with the knowledge that they are prepared for the holiday season.
If you need some advice on how to handle your Christmas cash flow, please email contact@vervegroup.com.au or give our office a call on 08 8120 4877.
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