The Christmas holiday break is a chance to recharge for the year ahead, especially after the eventful year we have had. Here at Fitzpatrick + Robinson, we’re looking forward to warmer weather (if it ever happens) and finally setting up an out-of-office email for the break. However, for business owners, this time can be particularly stressful without careful cash-flow planning.
It’s important to consider that even if your business continues to operate throughout the holiday season, your customers’ financial behaviour won’t necessarily remain the same.
In this blog, we’ve provided some simple strategies and helpful tips on how to best budget and prepare a cash-flow forecast for your business. However, at Fitzpatrick + Robinson, there’s nothing we don’t know when it comes to business finance, so if you need guidance in this space or assistance in applying for short-term finance to get you through the break, we’re here to help.
Why is cash-flow planning particularly important at this time of year?
Shutting down your business means you won’t be driving revenue for a period of time and sales may take time to get started again in the new year. Also, during this time staff leave needs to be covered in addition to your normal fixed overheads such as rent, creditors and tax compliance.
The budget and forecasting process ensures you know your numbers and are prepared for this time.
Here are some simple strategies that can help…
- Decide on your Christmas and holiday break dates as early as possible and 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 ensure you 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) – intend 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 one last beauty treatment before the break, so make sure you have planned for this and 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? Also, ensure you have everything you need for when you commence work in the new year.
- Make an arrangement with the Tax Office – if you find you are unable to 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.
Need support in this space?
If you’re stressed about how your business will make it through the holiday break, now is the time to organise your finances and even opt for short-term financial relief. With over 35 years of experience in Accounting and Business Advisory, the team at Fitzpatrick + Robinson can utilise our knowledge and innovation-led tactics to assist with cash-flow forecasting, budgeting or finance applications. Contact us today and we’ll get to know your business and set you up right for the holidays.