Managing Your Post-Christmas Cash Flow

For some businesses, Christmas is one of the most profitable times of year, while for others it marks the beginning of their quietest period. Regardless of which category you fit into, effectively managing your cash flow is vital for maintaining the livelihood of your business. Here are five tips for managing that post-Christmas cash flow.

Follow Up With Your Debtors: Quickly

For businesses and individuals alike, Christmas and the period afterwards can be a maze of money management. Ensuring all overdue accounts are followed up on in a quick and timely manner, may be the difference between being paid and not being paid.

January to March is the period that a lot of entities get their accounts in line for the year ahead. By following up on your debtors in a quick and timely manner, you can get in before other businesses they may owe money to. This means that your accounts are paid and settled before the funds dry-up. You can read more about following up unpaid invoices in this article.

Review Your Accounting Practices

Ensure that you have good follow up practices in place for your accounts procedures. Set yourself a clear time frame for following up.  By doing so, you are minimising the amount of overdue accounts that you are left with. That way, only accounts that need a push to recover get sent through to your debt recovery agents.

According to an article from Xero’s small business insights, cash flow falls to a yearly low across January. This means that as cash flow picks up, it is so important to be effectively following up overdue accounts – especially during February and March.

Forecast Your Cash Flow

If you have historical data for your business, use that to forecast figures for future holiday periods effectively. By understanding the data from previous holiday periods (and the time afterwards), you can ensure you can put plans in place and can mitigate unexpected cash flow shortages.

A great resource to help you with this is the cash flow forecaster from Business Victoria.

Prepare to Lodge Your BAS

Ensure that you’re using the down time to prepare to lodge your BAS for the next due period. If Christmas has been a particularly busy time of the year, make sure that you have effective practices in place to allow you to easily sort through receipts and invoices. This way, you don’t have to run around searching for information to complete your BAS.

Sort Out Your Contracts

If you are a service-based business, or one that provides goods on credit accounts, then early in the year is the perfect time to organise your contract and account terms. Ensure that you have clauses to protect your business and that your agreement allows you to minimise the potential of non-payment. 

We are currently taking expressions of interest for a free contract audit, to ensure you are adequately protected against bad debts. You can apply for this complimentary service on this page.

Whether the new year means that you are too busy to follow up on accounts or you need some more positive cash flow within your business, it’s important to sort out overdue accounts. Make sure that you are leveraging the time of year and making space for positive cash flow for your business.

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If you have overdue invoices that need recovery, you can easily submit a debt for collection by our expert agents in only five minutes, using our online form.