Do you have enough cash for the Christmas holiday period?

Yes I know it is only August.

December to February can often be a tough period for small businesses.  The pressure on cashflow is at it’s highest, often due to:

• Christmas close down periods
• Staff taking annual leave
• Customers taking longer to pay (they are on holiday and/or have their own cashflow issues)
• Requiring extra stock to cover a busy Christmas sale period
• GST payments due in both January (for Oct/Nov) and February (for Dec/Jan)
• Provisional tax payments due in January

The combination of lower sales/payments and higher cash outflow can push bank balances to their limit. 

By planning ahead, you can be better prepared:

• Forecast your cashflow for the next six months
• From your forecast find out when you will be short of funds
• Organise additional credit to cover you if you don’t have enough funds
• Consider delaying spend until after Christmas
• Review all your expense lines to see where savings can be made
• Put money aside each month into a separate bank account to cover holiday pay
• Put money aside each month into a separate bank account to cover your tax obligations
• If you will be late paying your suppliers, tell them before the payment due date, and arrange a payment plan
• If you will not be able to pay your tax obligations on time and in full, talk to the IRD before the payment due date to set up a payment plan

Having a plan means that you know what is coming, and you know what do rather than being in a panic when you should be recharging and spending time with friends and family.

Thanks for subscribing to my newsletter. I hope you have found it helpful.  If this is a topic you would like to learn more about, please get in touch.  Feel free to forward this newsletter to others.

As a business consultant and coach I work one to one with SME businesses, helping them to plan, solve problems and build a thriving business.

Ann Gibbard - Oxygen8 Consulting

ann@oxygen8.co.nz

021 682 014