The 15th December usually signals to us that end of the year trade is imminent.
As business owners we get anxious as we know: business will be slow over the last few days of December; bonuses and holiday pay are expected by employees; and we have to pay our suppliers on time.
Now the big question is, have you prepared for the January financial slump?
Business will be slow in end December and beginning of January so that means that your turnover will be less and the money coming in during the month will be less than the previous months. Now is the time to start preparing your business to have sufficient cash available to ensure that you can pay all your commitments on time.
It is important not to tie cash up in either your stock or debtors.
Reduce your stock holding as much as possible, try and keep only the items that you know will sell from now until middle January. Sell the slow moving stock on a special offer to get that cash in, or bundle it with other products to ensure that it leaves your floor and money comes in. If this is not possible, try and return the stock to the supplier for a credit.
Actively collect your customers’ debt! This means phoning or emailing them regularly reminding them of the outstanding account, remember that they are also trying to hold onto their cash. Offer the long outstanding customers a 2.5% or 5% discount on immediate settlement. They have already harmed your business by not paying on time, at least try to get something in before spending good money on bad money!
There are many more things you could do to increase your cash for the year end, be creative! If you need to discuss your year end cash flow obstacles, reach out to: Tiaan Geel