Holiday Cashflow Strategies for SMEs: Navigating a Stress-Free Season

Holiday breaks are a chance to recharge for the year ahead. We look forward to warmer weather and finally setting up an out-of-office email for the break. However, for business owners, this time can be stressful without careful cashflow planning to implement holiday cashflow strategies.

Even if you do continue to operate through the holiday season, your customers’ financial behaviour may not remain the same.

The strategies and tips shared below are generalised, however, we are here if you need to budget and prepare a cashflow forecast. We can also help if you need assistance in applying for short-term finance to get you through the break. Let’s share some holiday cashflow strategies below.

Why is cashflow planning particularly important at this time of year?

Staff leave needs to be covered in addition to your normal fixed overheads like rent, creditors and tax compliance. The budget and forecasting process ensures you know your numbers and are prepared. If you are closing the doors for a bit, you won’t be driving revenue during this period and sales may take time to get started again in the new year.

Here are some simple strategies that can help:

Set Clear Holiday Break Dates:
Confirm holiday break dates with staff, customers, and suppliers to manage expectations.

Budget and Plan for Annual Leave:
Factor in temporary staff if needed to cover staff leave during the break.

Decide on Leave Payouts:
Decide whether to pay out leave in full at the beginning of the break or continue regular payments throughout.

Review Work in Progress (WIP):
Plan to complete jobs or services that can be invoiced and paid before the break.

Capacity Planning:
Anticipate a rush before the holidays and ensure you have the capacity to maximise opportunities.

Stock-Take:
Assess if you need to order goods in advance to complete work in progress.

Making Arrangements with the Tax Office:
If facing difficulties in making payments, explore the option of applying for an instalment arrangement with the Tax Office. Consult with us for assistance and find out more here: www.ato.gov.au/individuals-and-families/paying-the-ato/help-with-paying/payment-plans

Preparing for a busy holiday season

For businesses expecting increased demand, careful planning is essential to make the most of the holiday rush. Here are a few additional strategies:

Staffing & Scheduling:
Plan for extra staff or extended hours to meet increased demand. Temporary staff may be an option if hiring long-term isn’t feasible.

Inventory Management:
Ensure sufficient stock levels for anticipated holiday sales, factoring in supplier lead times.

Sales & Promotions:
Consider offering holiday promotions or discounts to attract and retain customers, but plan carefully to avoid cashflow strains.

We are here to help

Get in touch if you need help preparing for business for the holiday season.