The last thing you want on your well-deserved Easter holiday break is unnecessary stress over cashflow. When it comes to managing cashflow over the holiday periods, there are some common mistakes I’ve seen small business owners make. Here are a few of them;
- Only planning for the Christmas holiday period and forgetting about the rest.
- Making unnecessary purchases or financial outlays before the holiday period.
- Allowing outstanding invoices to accumulate.
Each of these mistakes can impact on your financial reserves and affect your cashflow during the holiday period. However, there are steps you can take to ensure you’re managing your cashflow better.
Here’s my top 5 tips on how to manage cashflow when taking a break:
1. Be aware of your financial status and what it’s expected to be in the future.
You can do this by monitoring the business cash inflow and outflow on a monthly basis and comparing your end and start balance of the month, year on year. This forecast will help you track what your expected holiday cash-flow will look like, allowing you to make changes throughout the year to better support these periods.
2. Keep on top of your outstanding invoices.
Follow-up outstanding invoices ahead of your holiday or outsource them to an Invoice Financier for an immediate cashflow injection. Invoice Financing allows your business to continue thriving whilst waiting for customers to repay their balance.
3. Shorten payment terms for non-regular clients.
If you run 30-day terms for your regular clients, use 14-day terms for your non-regulars leading into the holiday period. This will ensure that your business isn’t taking risks on unreliable consumers. It also means you’re are more likely to have a balanced cash-flow.
4. Defer unnecessary expenditure.
Leave these things until your business can financially handle them.
5. Seek finance solutions in advance.
If you’re expecting a negative-cashflow trading period, organise finance before the holiday period.
At Limba Loans, we can help your business continue to thrive during the holiday periods with a small business loan to keep you on top. Call us today to talk to our friendly team about your specific small business needs.