With Christmas well and truly over, it’s a good idea to keep one eye on the New Year as it’s a prime time when cashflow problems can occur.
Taking a few proactive steps now before holiday fever kicks in will make sure you’re not left with money problems and a cashflow hangover come January.
1. Get invoicing
Your invoices should be have been out before Christmas in order for them to be processed before December 25th. If your invoice was due to be paid over Christmas or in the first few weeks of January, don’t be afraid to call clients and ask what the arrangements will be so you can be sure you’ll be paid early or your payment will be scheduled to arrive on time – record the name of the person you talk to and the time of the call too in case you need to follow up again.
2. Chase debts
If you have even slightly late payments outstanding, chase them up straight away – so if you don’t jump in there now, your payment could end up seriously delayed. No one wants a cashflow hangover
3. Spend carefully
Christmas usually feels like a one-way street when it comes to cashflow, with all the parties, presents and more. You don’t need to be a total Scrooge but it’s more important than ever that you use your business budget to keep outgoings in check and avoid overspending.
No doubt times are tough but there is no need to cancel the office party altogether. Be creative – get a team contribution, ask everyone to bring some food in, or do something fun that doesn’t have to involve alcohol.
4. Don’t forget to save
Don’t forget if you do a Self Assessment tax return your bill will be due on 31 January so you’ll need to have this money set aside.
The first quarter of the year can also be quieter for many businesses as people recover financially from the festive season – make sure you have a cushion of cash and don’t dip into it in case of this.
5. Christmas stocking
As you were probably aware, managing stock at Christmas can be tricky as you want to take advantage of boosted sales without leaving yourself with too much cash tied up in dead stock in the New Year. Talk to suppliers about how they can help by being flexible and use stock management tools to keep track of where you are.
6. To discount or not to discount?
Seasonal discounting is a delicate balancing act in today’s climate, especially when the ‘January sales’ have been known to hit as early as November in recent years. This January special offers can be a good way to keep things moving after the break.
7. Consider your lending needs
Be prepared if you think you might be short of money in January – it could be worth talking to your bank now before a crisis hits. Why not use the break to find out about alternative lending options like Funding Circle and Market Invoice too? At least open an account which won’t cost anything.
8. Get marketing!
Use the season of socialising to get out and see clients or network for new ones – useful gifts with your name on do work and this could help bring in some much-needed work for after the Christmas break.
What are your strategies for avoiding a New Year cashflow hangover?