The holiday season can be an expensive time for business owners. Between payroll, bonuses, inventory, marketing, gifts and year-end expenses, more money may be leaving your business than usual.
We help business owners keep their books organized and understand what’s coming in and going out, so they can plan ahead and avoid cash flow surprises. Here are a few ways to manage your cash flow this holiday season:
- Plan for holiday expenses. Make a list of the additional expenses you expect, such as employee bonuses, seasonal help, inventory, marketing, gifts and holiday events.
- Plan for bonuses and time off. If you plan to give bonuses, account for the extra payroll costs ahead of time. Also consider owner and employee time off, holiday closures and fewer working days that could affect your income.
- Collect unpaid invoices. Review outstanding customer invoices and follow up on overdue payments. The faster you collect, the more cash you have for upcoming expenses.
- Review upcoming bills. Look ahead at payroll, vendor bills, credit card payments, loan payments and other expenses so you can avoid a cash shortage.
- Review your inventory. If you sell products, check what you already have before ordering more. Too much inventory can tie up cash you may need elsewhere.
- Set aside money for taxes. Not everything in your bank account is available to spend. Set aside enough for upcoming tax payments, and talk with your tax professional if you’re unsure how much you may owe.
- Plan your cash flow ahead. Estimate how much you expect to receive and spend over the next few months so you can spot potential shortages early and adjust.
The holidays are busy enough without worrying about your business finances. A little planning now can protect your cash flow, keep you organized and help you start the new year in a stronger financial position.
Need help keeping your books organized and understanding your cash flow? Book a free 30-minute consultation.
This article is general information, not tax or legal advice for your situation. Talk with us about your specific needs.