Costs tend to go up over this time of the year: more staff, leave costs, downtime from non-trading days, as well as increased promotion costs, all mean that costs will push upwards.
Keep an eye on them. It’s great to get into the Christmas spirit as long as you don’t end up with a New Year hangover.
The new year will lead you into a quieter trading period and a tighter cashflow period. The March quarter tends to be the toughest cashflow quarter of the year.
You will need a cash buffer going into the new year. Don’t over commit yourself in the run up to year end and end up in trouble.
If you work with account customers, start your debtor follow up now. If your customers are under any cashflow pressures the Christmas period will increase the pressure.
The creditors who chase hard and early will get paid first. Don’t be the last supplier on the list – the basket may be empty by then.
Christmas is a great time of year. Just don’t get caught up in the rush and let things get out of control.
Greg Hayes is a director of Hayes Knight and specialises in taxation and business planning advice.
This article first appeared on StartupSmart.
