The Christmas period is crucial for many businesses. It often represents a key period of sales growth while simultaneously presenting challenges in managing stock, supply chains, and cash flow. Even after the holiday peak trading season has passed, businesses can face a shortage of cash with customers paying slower than usual due to the annual hiatus.
This is especially true at the moment where businesses have been facing unprecedented challenges all year. The only thing that may make the festive period more challenging for a business, is going through it without a strategy. Here’s our quick tips to make this holiday period easier for your business.
1. Request deposits on large orders
Try to get indications from key customers on volumes of orders anticipated during this period. This will help you plan the required stock levels and cash flow required to get you through. The earlier you get this information the easier it is to plan.
If you know your customer will be placing a large order, try to negotiate a deposit payment to help with the costs to manufacture. If you have a good relationship with your customer, they may be open to supporting your business during this period.
2. Remind customers of your payment terms
It is important that as a business owner you stay on top of what is owed and are actively following up on payments. Make sure you send reminders to all your customers of your payment terms. A phone call and an email to your account manager will keep your business front of mind. It is a busy period for everyone, so a reminder to get your customers on track will help.
3. Get your cash flow sorted
For business owners who are expecting an increase in demand, consider how you will fund this growth and how this impacts your overall cash flow position. The first step is to prepare a cash flow forecast. A strong point of reference is reviewing sales and payments from last year.
The Christmas break means customers are likely to miss or delay payments. Timelio can improve your cash flow by enabling you to get paid immediately, without waiting 30, 60 or 90 days for customers to pay. This takes the pressure off and provides the support you need during this busy period.
With a flexible strategy in place, you can get the cash flow boost required to pay suppliers on time, grow your sales and enjoy the Christmas period!