The Christmas season is when many Australian companies see their best sales. However, it can also be the most challenging time to stay afloat. Traditionally, businesses in various industries see a decline in output and sales, with some being compelled to shut their doors. Regardless of these difficulties, businesses must continue to pay salaries to employees and other overhead costs.
If you’re familiar with some of the various difficulties that come during the Christmas season, you must ensure that your company continues to operate well during this period. Here are some suggestions to help you in making preparations for the holiday season.
1. Focus Only on Necessary Spending
Avoid making unnecessary purchases during this time. Instead, remember to keep an eye out for public holidays and the influence that penalty rates have from business practice violations. Additionally, it is critical to monitor the number of trading days in December since this will almost certainly be less than usual.
Include any additional expenses that may arise due to the holiday season, such as Christmas parties and employee incentives. Remember to include these in your holiday pay needs.
2. Use Invoice Financing to Compensate for Cash Flow Shortfalls
You can better handle your end-of-year cash flow challenge by using invoice financing to get the money you are due much more quickly. After all, innovating your business practices can be the easiest way to optimise your cash flow.
Even the most successful businesses in Australia utilise invoice financing to boost their cash flow regularly. For this reason, it’s necessary to update your financing processes by strengthening your invoicing.
3. Obtain Payment from Your Customers
Don’t put off billing — invoice as soon as possible or risk being forgotten! Invoicing is the initial stage, but after that, you must put up further work in following up with debtors. When it comes to resolving debts with debtors, the closer you go to Christmas, the more difficult it will be.
Check if your customers are adhering to your payment policies and procedures. Keep in mind that overdue accounts that go unnoticed in December may not be paid until late January or even later. This is why delays in sending out invoices may have a considerable impact on your revenue.
When it comes to company cash flow, February the following year may be one of the most challenging months of the year. If you aren’t effective in following up payments, you may have to count some transactions as losses. This is why it’s vital to be strict with payment practices. For example, you may provide incentives for early payments to see a positive change in paying behaviour.
Conclusion
Because cash flow is the lifeblood of every organisation, it should be reviewed and optimised regularly. That’s never been more relevant than it is at the present moment, as the year draws to a conclusion. It is vital to maintain accurate cash projections., cash flow, and cash sources to minimise cash shortages in the future.
Being aware of the fundamentals of increasing cash flow may make a minor impact — which is much preferable to seeing no progress at all. Obtaining professional knowledge and guidance is an investment that will pay off in the long run.
New Wave Financial Planning experts can assist you with improved cash flow planning in the Gold Coast. We are financial institution experts that use the most up-to-date technology and procedures to provide the best possible service to our clients. Our services are provided to both local and national enterprises that need programs tailored and customised for efficiency. Get in touch with us right now!
