The holiday period is a time to re-charge for the year ahead, and wind down from the year that was. However, for business owners, it can be a stressful time for cash flow.

Have you got strategies in place to ensure you are in the best financial position this year? Agilis CA can help!

 

CA DEC Blog

 

Christmas holiday breaks are a chance to recharge for the year ahead – especially after the year that was 2021 (for most – STRESSFUL). 

When December comes around, we look forward to warmer weather and finally getting to set up an out-of-office email for the Christmas break. However, for business owners, this time can be very 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.

 

Why is cash flow planning particularly important 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 for Christmas, you won’t be driving revenue during this period and sales may take time to get started again in the new year. To help with this, we strongly recommend cash flow planning. 

 

Strategies that can help alleviate cash flow stress over the Christmas break

 

The strategies and tips shared below are generalised; however, Agilis CA is here if you need assistance budgeting and preparing a cash flow forecast to get you through the break.

 

 

1. Decide on your Christmas and holiday breaks 

 

    • Once finalised, ensure you confirm these dates with staff, customers, and suppliers. This makes the planning process easier.  

 

2. Budget and plan for annual leave 

 

    • Remember that pay rates may be higher than standard hourly rates, and factor in statutory public holidays e.g., Christmas Day, Boxing Day, New Years Day etc. 

 

3. Decide on employee pay

 

    • You need to decide on if you are going to pay out leave in full at the beginning of the Christmas break or continue to pay as per usual throughout the break.

 

4. Review your work in progress (WIP) 

 

    • Make sure you 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).

 

5. 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. Be realistic about how much you can get done vs. the number of employees you have that can help with this. 

 

6. Stocktake 

 

    • Do you need to order in goods now to be able to complete work in progress? Check that there is enough stock on hand available. It is important to ensure you have enough stock leading up to the Christmas period, as shipping/delivery time frames are often delayed due to the high influx of orders placed, so it is crucial you get in early. 

 

7. Make an arrangement with the Tax Office 

 

    • If you find yourself in a position where you cannot make payments, it is possible to apply for an installment arrangement. There are costs associated with this, however it may provide a solution that gets you through the holiday period. You can talk to us about this option. 

 

Talk to Agilis CA if you need assistance with cash flow planning 

 

If you can’t make ends meet, now is the time to organise short term financial relief. Christmas is a time to relax with family and friends – and we want you to be able to do that. 

Agilis CA can help with implementing strategies to better protect your business – such as cash flow planning, to help keep you on top of your game this Christmas period. 

Contact Agilis CA today! 

 

This blog was originally published by BOMA, but has had edits made by Agilis CA for the benefit of our readers.