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Cash flow

Make sure your cashflow is ready for the holidays

By The Taskmaster
Wednesday, 15 December 2010

The Taskmaster on cashflow after Christmas holidaysAs a start-up entrepreneur, it is really crucial that you enjoy your Christmas holiday. Because when you get back, there is a chance that things could get very, very ugly in the cashflow stakes.

 

One of the big problems with the Christmas break is that everything stops and it takes an extremely long time to get started again. For example, invoices that you sent out in December are likely to sit on someone’s desk for most of January and possibly even into February if the payroll person at your customer’s company takes a long holiday.

 

You need to be prepared for this.

 

Where possible do a bit of a ring-around and chase any outstanding debts in the last week or so of Christmas.

 

If things are looking a little grim, it might be worth getting in touch with suppliers and letting them know the situation. They are probably expecting a cashflow break too, but it doesn’t hurt to be open with people.

 

Finally, work out if you are going to need some working capital to get through the post-Christmas period, just to keep the wolves from the door. If so, make sure this capital is in place.

 

Get it done – today!

Comments (1)

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Business Skills Tas
Taskmaster great advice, businesses should always be making sure they are paid on time.

Another other critical issue for businesses who suffer cash flow fluctuations (think of a dairy farmer when the cows aren’t producing, there is no money coming in), is that they negotiate with their financiers to make payments only when there is positive cash flow. This doesn’t mean businesses make less payments in dollar terms during the year, they make fewer payments made to suit when the business has a cash flow.

An example might be a vehicle on Asset Purchase is required to make $6000 in loan repayments per annum, normally this would mean twelve payments of $500, but the business may have little cash flow for two months, instead the business makes ten payments of $600.

Often known as seasonal payments, it is a great way to make sure that all payments are made on time.
Business Skills Tas , December 16, 2010
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