On the first day of Christmas…some tips on managing your cash flow over the festive break


Toby Rintoul

Toby Rintoul

Business Solutions Partner


Christmas and cash flow don’t tend to go hand in hand. 

With the festive season upon us, many businesses are preparing to close their offices over the holidays and, for small businesses in particular, closing up shop for two weeks can mean a serious issue for cash flow.

Not only will they be paying wages to staff who may be away on holidays, as well as keeping up with other fixed costs like credit repayments or rent, but risk of suppliers not processing payments until the New Year could be crippling.

So how do you get around this? Planning and forecasting your expenses is the answer. Here are my top tips to keep your cash flow…flowing in December!

Consider your payment terms

A common problem for most businesses is the late payment of invoices which can have a serious impact on the bottom line. So, for December, consider asking for a deposit from clients or customers up front. 

Offer incentives to pay early

No one can resist a discount and Christmas is the prime time of year to give one! Offering 5 – 10% discount to suppliers as an incentive to pay their invoice before Christmas can be an appealing offer.

As well as thinking about encouraging early payments you should also have a process in place for chasing late payments and it’s a good idea to consider including penalties in this policy. Think about the best times to start re-issuing your invoice and ensure you have a stage where you follow up with a chaser phone call.

Remember your additional Christmas expenses!

Cash flow isn’t just about the money you’re receiving, it’s also about the money you’re paying out. Make sure you have a process in place to itemise your outlays and the exact dates they’ll be paid to ensure you have a handle on your budget.

Additionally, it’s also likely you’ll be paying your staff a bit earlier than usual, so be sure to revise your payment terms so payments arrive before money goes out. It’s a nice idea to compile a status report of the payment history of your clients to get a grasp of which clients you can rely on paying on time to then gauge your cash flow in December.

Got a question? If you have any queries about managing your cash flow, get in touch with a member of our Business Solutions team for an initial, informal chat.