Business Cashflow during the Holiday Season

Focus on Your Cashflow in the lead up to the Christmas & New Year Holiday

By Tony Monisse

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

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

  • 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;
  • Review your eligibility for Job Keeper 2.0 for the period for January to March 2021;
  • If JobKeeper payments have been received by a business, they are exempt from Payroll Tax in WA, and you should review to ensure they have been excluded from taxable wages in monthly payroll tax reporting.

 EXPENSES

  • Review all discretionary expenditure, including training, travel etc.;
  • Return any hire equipment not needed over the holiday period;
  • Pay your December quarterly superannuation by 28 January 2021 to ensure you get a tax deduction.

 FUNDING

  • Prepare your December, January, and February weekly cashflow forecast to identify any funding shortfalls;
  • If needed, renegotiate terms with key suppliers, speak to the tax office or seek additional funding from your bank.

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.