Another year is almost over, and whilst the finish line may be in sight, Christmas time can come with both its gifts and challenges for businesses of all shapes and sizes.
For retailers or e-commerce, you may be ramping up for the busiest time of year. For service-based businesses, workflow may be really starting to slow down, and your key employees may be taking some well-deserved leave.
Whichever category you fall into, the month of December leaves no time for complacency and it’s important you stay on top of all things budgets, planning, cashflow and expenses before things blow out!
Between Christmas parties, client gifts and staff bonuses, it can all start to add up very quickly. Waking up on New Year’s Day without a financial hangover will not only feel great but it will set yourself up for the year ahead.
Cash is King!
We’ve said it before and we’ll say it again – knowing your cashflow is so important. It is near impossible to plan if you don’t have a realistic and solid idea of how much cash is coming in and out of your business.
The month of December may see a huge spike in revenue, but if the months of January and February are your quietest months, budgeting will be crucial, so you have enough working capital to see you through the next few months.
If things really start to slow down for you in December yet your major expenses remain the same – wages and rent – you need to know how to plan for this by reserving some cash from your busier months.
There is a plethora of accounting software out there now that can give you an instant snapshot of your cash position, plus tonnes of job management software that helps you manage your time and costs so you can workout what your business has coming up.
As the old saying goes if you fail to plan, you plan to fail…
It’s time to chase those late payments
Is this something you have been putting off? Well, stop procrastinating and make sure you have started chasing up anyone that owes your business money. It can be easy to have these amounts go unnoticed, but you’d be surprised how quickly this debt can build up.
Once you start the conversation with your debtors the sooner they will pay and it may just be that little cash injection your business needs come the New Year.
What goes around comes around so if you may also be putting off paying some bills, in the name of the Christmas spirit, get up to date on all your payments too. This will fill you with some Christmas cheer we promise!
Not everything is tax deductible…
After being stuck in lockdown for what feels like most of2021 it is totally understandable you probably feel like splashing out this year on a Christmas party to end all Christmas parties. Or maybe you really want to splurge on gifts for your staff and clients for hanging in there.Whilst this is so lovely, you do need to keep in mind which of these expenses are tax deductible before going too overboard.
Without realising it you may be triggering fringe benefits and unwanted income taxes. Most expenses such as Christmas parties, gifts to staff, food and wine or even cash bonuses are usually captured in some way by the ATO so it’s best you check with your accountant first!
So Merry Christmas from us!
Christmas time doesn’t have to be manic and stressful. With a decent amount of planning and strategy, you can still have your Christmas pudding and eat it too.
If you’d like some help planning your silly season and beyond, speak with one of the Attune team on 1300 866 113 or click here to start the conversation on email.