Have you got a strategy for a financially stress-free holiday period?
- Published: December 21, 2020
- Author: Asparq
Christmas holiday breaks are a chance to recharge for the year ahead especially after the year we have had. We look forward to warmer weather and finally setting up an out-of-office email for the break. However, for business owners, this time is a stressful without careful cash-flow planning.
Even if you do continue to operate through the holiday shutdown season, your customers’ financial behaviour may not remain the same.
The strategies and tips shared below are generalised, however, we are here if you need to budget and prepare a cash-flow forecast. We can also help if you need assistance in applying for short term finance to get you through the break.
Why is cash-flow planning particularly important at this time of year?
Staff leave needs to be covered in addition to your normal fixed overheads like rent, creditors and tax compliance. The budget and forecasting process ensures you know your numbers and are prepared. If you are shutting down, you won’t be driving revenue during this period and sales may take time to get started again in the new year.
Here are some simple strategies that can help
- Decide your Christmas and holiday break dates – confirm these with staff, customers and suppliers.
- Budget and plan for annual leave – remember the pay rates may be higher than standard hourly rates, also factor in statutory public holidays.
- Decide – if you are going to pay out leave in full at the beginning of the Christmas break or continue to pay as usual throughout the break.
- Review your work in progress (WIP) – plan to complete jobs or services that can be invoiced and paid before Christmas (remember if you don’t invoice and get paid before Christmas, you may not see the money until mid to late January).
- Capacity planning – There is often a rush to get everything done before Christmas, whether it’s the kitchen benchtop installed or the beauty treatment before the break, so make sure you have the capacity to maximise on this.
- Stock-take – Do you need to order in goods now to be able to complete work in progress? Check that there is stock on hand available.
- Making an arrangement with the Tax Office – if you find you can not make payments, it is possible to apply for an instalment arrangement. There are costs associated with this, however it may provide a solution that gets you through the holiday period. Talk to us, we can help.
Need financial support?
If you can’t make ends meet, now is the time to organise short term financial relief. Please contact Dean Bassal, Director of Asparq Accounting & Advisory if you need any help with cash-flow forecasting, budgeting or finance applications.
The information contained herein is of a general nature only and is not intended to be relied upon nor is it a substitute for appropriate professional advice. Whilst all care has been taken in the preparation of the material, it is not guaranteed to be accurate. Individual circumstances are different and as such require specific examination. Asparq cannot accept liability for any loss or damage of any kind arising out of the use of or reliance upon all or any part of this material. Additional information may be made available upon request.