So, we’ve stuffed ourselves with trick or treat sweeties and delighted at fireworks. Now we really are on the countdown to Christmas. But what do small firms need to start thinking about in the run-up to the festive season?
Chase up invoices before the break
For those businesses which aren’t in retail, some are likely to be winding down over the Christmas period. Many of you will be shutting up shop completely over Christmas and New Year so you will want to make sure that you have all the invoices sorted before you go on your own Christmas break. For example, prepare invoices that cover regular payments (such as retainers and contracting hours) and get them to your clients before you finish.
For more ad-hoc payments, prepare the majority of the invoices before Christmas and forward to clients, requesting payment on their return and advising that an additional invoice may be forwarded on your return.
If you issue your statements at the end of the month, you may want to consider bringing it forward - to 18 December, for example - so clients will be aware of what is due before they get caught up in a whirl of secret santas and parties.
Spread some Christmas cheer
As it is the season of goodwill, Christmas is the perfect opportunity to build closer relationships with your clients. However, it is important that you make the right impression. If you’re going to send a card, for example, make sure it is addressed to the right person, properly signed and does something to make your company seem memorable. Be sure to show appreciation, thanking them for their business and reminding them that you hope to continue a good relationship into 2016.
Ensure staff have everything covered
Over Christmas and New Year you are likely to have a number of staff taking long holidays - many will aim to have an uninterrupted break from the office that could last two weeks - and you might find that you have hardly any staff to hand. Make sure you manage your staff to ensure that all appropriate work is completed before the Christmas break and that there is somebody to cover all the vital tasks until the New Year.
Prepare for a lack of working capital over Christmas
For many industries, Christmas will be the busiest time of year. For others, it could be the time when finances are most squeezed and working capital could become a problem. Debtors can be slow to pay and the down-time either side of Christmas day means that valuable chargeable time is lost and your standard payment terms can be more difficult to apply.
Even the best prepared business can experience unexpected cash spikes, and these could put pressure on your cash flow at a time where you aren’t necessarily replacing it with incoming payments. It is therefore important to remember that options such as invoice financing or taking out a short-term business loan can keep the balance sheet happy and allow your business to head into the New Year with renewed focus and ambition.