Hopefully you experienced a brisk trade in December. With the increase in sales, you could find that your cash flow differs during this month compared to any other time of the year. Stay on top of your December cash flow by making sure that you follow these tips:
Stick to a Budget
With the till ringing at an increased rate and takings looking higher than expected, it is easy to get carried away and spend more than you usually would. But this could be dangerous and should be avoided. Ideally you would have already planned for this prior to the Christmas rush by drawing up – with the help of your local bookkeeper – a Christmas budget. By forecasting an increase in sales, you could have funds set aside that you know you can spend on more stock or expanding products or services if needed.
Consider Extra Expenses
At Christmas, profits should increase. But many businesses find that expenses and outgoings can also shoot up almost without warning. Paying staff for overtime, throwing Christmas parties, lost days through adverse weather conditions, increased heating and electrical usage; it all adds up. Avoid facing an eye watering bill by employing an outsourced bookkeeper, ideally all year round, to regularly check up on expenditure so they can warn of or even forecast in advance any potential problems.
One reason cash flow becomes a problem during December is as everyone is so busy, invoices are often sent out late and, as people take time off work for the holidays, payments can become delayed for several weeks after Christmas. Make sure that you or your bookkeeper sends out invoices effectively and on time.
Outsourced bookkeepers are skilled at managing all aspects of cash flow management. By leaving it to them, the burden is removed from your shoulders, leaving you free to drive up sales as best you can before, during and after Christmas.