The festive season is fast approaching and this year, more than ever, it’s important for businesses to ensure they have their cash flow management in order. Here are our top 8 ideas to help you through the upcoming period.
While the holiday period is usually a boon for retailers, cash flow problems still hamper many businesses, as accounts departments across the country take a much needed holiday.
With COVID-19 causing all sorts of headaches and heartaches for businesses big and small in 2020, you’ll want to make sure you’re transitioning into 2021 with your best foot forward.
So, with the festive season just around the corner, below are 8 cash flow tips for navigating the silly season.
1. Invoice now: Begin sending out your invoices now, and start with clients who have a history of being tardy.
2. Discounts: If you want invoices paid super fast, consider offering a 10% discount to clients who pay within 7 days.
3. Extension, please? Chat to your major suppliers about possibly extending your terms over the upcoming period to 30 days (or more, if possible).
4. Outsource: If you don’t want to personally ask clients to pay overdue invoices for fear of getting them offside, use accounting software such as Xero, or hire a third-party bookkeeper, to chase up the payments on your behalf.
5. Invoice Financing: If you don’t want to hassle your clients to pay you promptly, another option is Invoice Financing, which is a line of credit secured by unpaid sales invoices (get in touch to find out more).
6. Request deposits: For new projects over this period, consider requesting a 20% to 50% deposit from the client.
7. Minimise expenses: Minimise unneeded expenses where possible. For example, if you don’t have the personnel to onboard new clients during the holiday period, consider switching off or dialling back your Google and/or Facebook ads.
8. Last but not least, get in touch. If you think you’ll still have a gap in your business’s funding over the months ahead – especially with JobKeeper winding down – then it’s important to start considering your financing options as soon as possible.
It’s worth noting that the RBA recently cut the official cash rate to record low levels, and many lenders are offering competitive financing options to businesses as a result.
So to find out more about what financing options are available to you and your business, get in touch with your Allied Broker today.
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