Seasonal fluctuations and holiday shutdowns collide during Christmas and New Year, making cash flow management especially difficult for many business owners. Distracted by the countless tasks you need to complete at this time of year – both business-wise and personally – it’s easy to neglect things.
However, cash flow management is one area you shouldn’t overlook at any time of the year. It is, after all, what keeps your business afloat.
We run through some quick tips for managing cash flow during the festive season.
Chase unpaid invoices
Unpaid invoices are the enemy of positive cash flow, and a common problem for small business owners. There are, however, several strategies for both avoiding unpaid invoices and encouraging payment of overdue invoices.
When chasing unpaid invoices, be sure to communicate using several channels – don’t just rely on email. For clients who appear to be struggling financially, consider offering a payment plan that will assist them while ensuring you are eventually paid.
The struggle is real for invoice-based businesses during the holiday period
- Research shows 47% of invoices are paid late, and almost half of small business invoices take 60 days to be cleared.
- Wait times for the payment of invoices stretch even longer during January.
Enable mobile payments
Australians love smartphones – with 88% of us owning one and 35% checking our phones within just five minutes of waking up in the morning. So it makes sense to get on board and operate in line with how your customers are running their lives – often from their mobile.
If your business has an EFTPOS machine or other contactless point-of-sale system, you’re already set up to accept payments from mobile wallets like Google Pay and Apple Pay. Find out more about allowing mobile payments and how they can boost cash flow.
Sweat the small stuff
Sometimes it’s easy to forget about the small things in business. Don’t. It’s the small things that can make the biggest difference to your bottom line.
Here are some ideas to get you started:
- Review your prices.
- Use inventory systems.
- Try cross-selling and upselling.
- Review all costs and cut or negotiate a better deal where possible.
- Take theft-prevention measures.
- Look for any waste and cut whenever possible.
- Encourage a sales mindset across the entire organisation.
Get savvy with tools
To keep on top of the numbers in your business, there are plenty of tools to assist and provide insights into your cash flow position.
Your accounting software is a good place to start. Take a look at the available data, reports and tools that can help you go beyond the basic invoice-automation and expense-recording functions.
These tools are also worth a look:
Our cash flow tool is a simple and easy-to-use solution that will handle all your cash flow forecasting needs, with features such as:
- Instant calculations for cash flow.
- Insights on your incomings and outgoings.
- Alerts for when cash balances fall below a minimum.
- A business plan that evolves and changes with your business.
Forecast your year ahead with our profit and loss projection tool:
- Monitor current activity.
- Develop projections and sales targets.
- Tweak your business model based on results and insights.
Contact Prospa to find out how a small business loan may be able to help you manage your cash flow during the holidays.