Focus On Your Cashflow In The Lead Up To the Christmas Holiday Period

Cashflow in the lead up to the Christmas Period
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By Tony Monisse

Focus on your Cashflow in the lead up to the Christmas Holiday Period

A handy checklist for business owners who want to successfully manage their cashflow over the upcoming holidays.

Cashflow in the lead up to Christmas can so often be overlooked as it is such a busy time for all businesses. The upcoming Christmas and New Year holidays require business owners to give thought to how they are going to run their businesses over that period and what actions they are going to take to successfully manage their cashflow. The checklist below is a reminder of the key actions that all business owners should take in regards to sales, staffing, expenses, and funding related matters.

SALES

  • In the current market, where there is limited access to labour and stock, is there an opportunity to increase prices for your goods and services?  
  • Make sure you invoice earlier in December so you do not miss your customers’ processing run and their timely payment. If appropriate, you might even raise an interim invoice;
  • To increase cashflow in the short term, close any outstanding sales orders and focus on sales that have a short sales cycle versus sales with a long sales cycle;
  • Invoice your outstanding work in progress;
  • Focus on sales where there is the opportunity to run down inventory, including your fast-moving inventory items;
  • Quit slow moving and old stock – if you have not sold it now, take the loss and convert it into cash;
  • Actively focus on collecting your debtors before your customers close their office for the holidays;
  • Offer other payment options, including credit card and fee funding. 

STAFFING

  • Review your staff levels;
  • Agree with your staff to take leave subject to applicable award or enterprise agreements;
  • Review your level of casual staffing versus permanent employees;
  • Review overtime levels.

EXPENSES

  • Review all discretionary expenditure, including training etc.;
  • Return any hire equipment not needed over the holiday period.
  • Pay your December quarterly superannuation by 28 January 2022 to ensure you get a tax deduction.

FUNDING

  • Prepare your December, January, and February weekly cashflow forecast to identify any funding shortfalls;
  • If you are ramping up stock and equipment purchases due to supply chain constraints and delays in transport, it is important that timing of the purchases and payments are allowed for in the cashflow forecasts;
  • If needed, renegotiate terms with key suppliers, speak to the tax office or seek additional funding from your bank;
  • Engage with emerging second tier financiers that may be able provide funds with less stringent lending criteria;
  • Check if you are eligible for the Government’s SME Recovery Loan Scheme where the government will guarantee 80% of loans up to $5 million – you need to act quickly as the application period ends on 31 December 2021
  • Review if you can vary down your December quarter income tax instalments, especially where you expect your 2021/22 taxable income to be less than your 2020/21 taxable income

If you would like to discuss how you can better manage your business’s cashflow over the holiday period, please contact your advisor or Tony Monisse on (08) 6212 7200. 

For all other enquiries please contact us HERE or at admin@brentnallswa.com.au or call us on (08) 6212 7200

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OUR DIRECTORS

Chris Mandzufas

Chris Mandzufas

Chris has a diverse range of skills and experience as a result of providing accounting, taxation, advisory board and management consulting services to owners and directors of fast growing businesses.

Chris Smith

Chris Smith

Chris Smith has been a member of the Chartered Accountants Australia & New Zealand since 2006, a member of the Tax Institute of Australia since 2013, and a registered Tax Agent since 2018.

Tony Monisse

Tony Monisse

Tony’s key focus is the integration of strategy and financial management. To this end he has developed tools and process that facilitate this integration, including business modelling, target setting and rolling cash flow forecasts.

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