Photo: Annie Spratt / Unsplash
The holidays can be a stressful time, especially when you're managing a business alongside all the personal commitments that pop up during this period. That's why it's particularly important to stay on top of your business cash flow. The last thing you need is to fall short at the most expensive time of the year, leaving you in an even more stressful situation.
In the following sections, we'll go over seven tips for managing business cash flow, so you can spend more time doing what you love this festive season.
Repair Rather Than Replace
One of the best strategies you can deploy around Christmas is to repair any broken machinery or tools rather than replacing them. While this won't be possible for everything, you'd be surprised at how many items can actually be repaired.
This could mean ordering some aftermarket Pellenc grape harvester parts to fix your farm machinery, or upgrading the RAM on your laptop to free yourself from the frustrating lag that’s had you dreaming of a new (and expensive) computer. These fixes can be equally effective for a fraction of the cost. Best of all, you’ll be doing the planet a favor by reducing unnecessary waste – now that’s the real Christmas spirit!
Plan For Changing Income
Most people know their personal outlay is probably going to increase during the holiday period, so they plan accordingly. Many businesses, however, don't do the same type of forecasting. Whether you have a seasonal spike or dip, your business income will change through the festive season. So it's a good idea to plan for this. Make the most of any periods of high turnover, with it in mind that they’ll carry you through seasonal lows.
Stock Up Early
Stock can be hard to get during the festive period, and you'll also spend extra time waiting for freight. Both of these factors can negatively impact your cash flow, so it's best to stock up well before the holidays come around. This can be difficult to predict, especially for newer businesses that don’t yet have a lot of sales data from previous years. However, for non-perishables, the general rule is that it’s better to have a little more than you need rather than not enough.
Re-Evaluate Your Logistics
Speaking of freight, now is a great time to analyze your logistics and see if there are any areas that can be streamlined. Not only will this help decrease lead times, but it can also save you money and open up new markets to you. There are great options for 3PL logistics, so do some research and see if any fit your needs.
Stay On Top Of Your Invoicing
During the busy holiday period, basic administration is often overlooked. Unfortunately, this can mean missing out on money you're owed, so be sure to be on top of your invoicing during this time.
Chase Up Late Payments
If you do find some clients are late to pay during this time, chase them up before any further work is completed. This protects you against potential losses snowballing while also improving cash flow. Never feel guilty about politely (but firmly) chasing up late payments – it’s the holidays for you too, so you don’t need to make exceptions for anyone.
Get Leave Requests Sorted Early
If possible, get your staff to request their leave well in advance. Then you’ll know who will be off when and can plan accordingly. This is the easiest way to ensure you don’t end up short-staffed in such a busy period.
Managing cash flow during the festive season can be difficult since you're dealing with a lot of extra personal obligations at a time when staff often require time off. By implementing these tips, however, you'll be able to stay on top of things more easily. In turn, this should help you find more peace and joy during this special time of year. Happy holidays!
