Focus On Your Cashflow in the Lead-up to the Christmas Holiday Period

By Tony Monisse

Focus on your Cashflow in the lead-up to the Christmas Holiday Period

A handy checklist for business owners who want to successfully manage their cashflow over the upcoming holidays.

Cashflow in the lead-up to Christmas can often be overlooked as it is such a busy time for all businesses. The upcoming Christmas and New Year holidays require business owners to think about how they will run their businesses over that period and what actions they will take to successfully manage their cashflow. The checklist below is a reminder of the key actions that all business owners should take regarding sales, staffing, expenses, and funding-related matters.

SALES

• In the current market, where there is limited access to labour and stock, is there an opportunity to increase prices for your goods and services?  
• Make sure you invoice earlier in December so you do not miss your customers’ processing run and their timely payment. If appropriate, you might even raise an interim invoice;
• To increase cashflow in the short term, close any outstanding sales orders and focus on sales that have a short sales cycle versus sales with a long sales cycle;
• Invoice your outstanding work in progress;
• Focus on sales where there is the opportunity to run down inventory, including your fast-moving inventory items;
• Quit slow-moving and old stock – if you have not sold it now, take the loss and convert it into cash;
• Actively focus on collecting your debtors before your customers close their office for the holidays;
• Offer other payment options, including credit card and fee funding. 

STAFFING

• Review your staff levels;
• Agree with your staff to take leave subject to applicable award or enterprise agreements;
• Review your level of casual staffing versus permanent employees;
• Review overtime levels.

EXPENSES

• Review all discretionary expenditure, including training etc.;
• Return any hire equipment not needed over the holiday period.
• Make sure December quarterly superannuation is paid and cleared into all employees’ nominated superannuation funds by 28 January 2025 to ensure you get a tax deduction.

FUNDING

• Prepare your December, January, and February weekly cashflow forecast to identify any funding shortfalls;
• If you are ramping up stock and equipment purchases due to supply chain constraints and delays in transport, it is important that timing of the purchases and payments are allowed for in the cashflow forecasts;
• If needed, renegotiate terms with key suppliers, speak to the tax office or seek additional funding from your bank;
• Engage with emerging second-tier financiers that may be able provide funds with less stringent lending criteria;
• Review if you can vary down your December quarter income tax instalments, especially where you expect your 2024/25 taxable income to be less than your 2023/24 taxable income.