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Although fun, Christmas can be an expensive time of year for many business owners. We have put together four simple tips to help you enjoy the festive season whilst maintaining your small business finances.
You may find it easier to make sales during the Christmas period, but it can be tricky to run a profitable business and keep your workforce engaged.
If you are planning to hold a Christmas party for your staff this year, make sure that you take costs into consideration. This also applies if you are planning to give gifts or bonuses to either employees or clients; although it may be a nice touch and seem like a minor cost, they can add up and massively impact your cash flow – so make sure you budget for this.
Delay finalising profits
As Christmas day draws closer, customers start to panic buy last-minute presents. If you have extended your gift refund policy, or even if not – be prepared for an influx of refunds after Christmas. Unfortunately, the return of unwanted gifts can affect your forecast, so bear this in mind when making calculations and plans for 2017.
Prepare for unexpected costs
With the new financial year looming in 2017, budget changes also await. Changes to small business finance, such as increases to the national minimum wage are unavoidable and can be expensive. If possible, you should always try to keep some emergency funds aside. With January’s self-assessment tax return around the corner, a business cash advance can solve cash flow problems by giving you the additional funding you need with flexible repayments in line with your card turnover.
There is currently a major issue with late payments to small businesses. Only 51 percent of small businesses claim they are paid on time – this means 49 percent of businesses face real issues with their finances. Small business owners can wait up to six weeks to receive payments, making it difficult to manage a healthy cash flow. If you have certain suppliers who constantly delay payments, it could be an idea to address it with their accounts department.
If you are planning on paying your employees’ wages early in December, make sure that you have available funds. Be realistic with your staff, and if you are not entirely sure that your incomings will be cleared in time, don’t commit to early payments. It’s better to be up front and honest rather than give your workforce false hope!
If you need further help managing your small business finances in the lead up to Christmas, a business cash advance could be the instant cash flow boost you’re looking for. Call 0800 3777 402 or visit www.quickcapital.co.uk to get in touch with one of our advisors and see how much you can raise.