How to Manage Cash-Flow Over Christmas

1. Make an Action Plan

The first step would be to create a pre-Christmas action plan, which could act as your saviour. Consider these questions first of all:

• What will your opening hours be?
• How many staff will you need to cover shifts?
• What is your Christmas party plan?
• How many customers would you like to send cards/gifts to?
• Will you hold any special offers to increase customer spending?
• Do you have enough stock to cover the Christmas period?

Think about the month, before, during, and after Christmas and the effect on your business. This could help you realise important areas, which require your attention.

2. Use a Cash-Flow Checklist

• Budget your festive spending – Treating employees, customers, and prospective clients with gifts can be very exciting. However, ensure you plan how to do this. Extravagant gifts and expensive Christmas parties can all add up.
• Invoice early – Send out invoices as soon as work has been completed or goods have been shipped. Try not to leave it until the last minute, as there’ll be no one in the accounts department there to pay them, until everyone returns after Christmas.
• Accept online payments – Ensure it is as easy as possible for customers to pay, then they can pay quickly and punctually. By accepting online and card payments, you will get instant access to the cash owed to you. It could also be a great idea to offer a small discount for instant payment.
• Choose whether to stay open or close – If your business doesn’t do much over Christmas and employees have no work, then it may be worth considering closing for the festive period.
• Don’t forget about January – With all the festivities it can be easy to forget that life will return to normal, with business as usual in January. For some businesses, this may be a slow period. However, wages still need to be paid, rents may be due, and supplier invoices need to be settled.

3. Stay Prepared

It could be worth applying for additional funding before Christmas. Leaving applications for finance to the last minute may not be the best idea. If you need additional funds to purchase stock, need a safety net, or think you may have a cash-flow gap during the festive period, then don’t leave it late.

There are quick wins that can help, such as VAT or Corporation Tax funding, Business Loans, Merchant Cash Advances, or Invoice Finance. All of these types of funding can be applied for prior to being needed and an offer can sit waiting ready for the business to draw on.