How to Avoid the Holiday Cash Flow Crunch

Many Australian businesses experience their highest sales during the holiday season but for some it can be the toughest time of all to maintain healthy cash flow. 

Some businesses take time off over the Christmas / New Year period resulting in a decrease in production and sales. Depending on the sector, some businesses shut down completely for 2 to 4 weeks but that means having to pay wages to staff on holidays as well as keep up with other fixed costs like rent and loan repayments. 

If you’re aware that your business is facing this slowdown over the holiday season you can make plans to ensure that you’re cashed up beforehand.

1. Delay Expenses

As much as possible, put off unnecessary spending during this period. 

It’s prudent to hold off on any repairs and maintenance that aren’t urgent until cash flow is healthier. 

2. Factor in Additional Expenses

Every year businesses encounter additional expenses - these need to be factored in, such as Christmas parties, staff bonuses and even additional supplies as a result of increased sales. 

Also take heed of any holiday pay requirement if you have staff. Check the number of trading days in December and January as it’s likely to be fewer than normal and any available cash will have to be stretched out further. 

3. Follow up on Invoices

Ensuring that your customers are meeting your payment terms is simply good business practice. 

Overdue accounts in December may not be paid until late in January or possibly even later. So do not wait to invoice - and certainly put in the extra effort into following up as early as possible. As we’re getting closer to Christmas it will be more difficult to collect. 

January and February can be the worst months of the year for business cash flow so if you’re not successful following up it might be quite a while before you get paid. 

As part of your follow up consider offering an incentive for timely payment.

4. Apply for Business Finance

The better way to solve the end of year holiday cash flow crisis is by using Business Finance.

Lenders understand that unexpected challenges arise. That’s why they are offering funding within 24 hours of $5,000 to $300,000. Conditions apply.

If you’re in need of extra stock over Christmas…

If you need to hire extra staff to cover the busy trading period…

If you’re anticipating a cash flow shortfall in January following a quieter post-holiday period…

We can help. Contact us to find out how you could currently benefit from an 8-week repayment holiday.