It’s the festive season! You know how that works – seasonal fluctuations are at their peak on either end of their scales. Some businesses are celebrating their busiest season while others are closing their doors, and others are halting production altogether (which means those bills aren’t going to pay themselves).
Regardless, cash flow is one of the most important aspects of building a healthy business. Undoubtedly, cash flow problems are a major cause of failure for small businesses, which is why cash flow planning should never be overlooked because of its importance. Likewise, seasonal cash flow problems are also crucial and should not be overlooked.
It is important to avoid and fix cash flow problems from the very beginning, as getting your business off on the wrong foot is difficult to recover from. You should still monitor your commercial debt collection position regularly, even if you’ve been in business for a while, to avoid any problems.
In this article, we provide some tips on how small businesses can better manage cash flow during the holiday season on behalf of a professional debt collection agency in Melbourne
Get organized:
To avoid cash flow problems, planning is essential. You should start planning early if your business is likely to suffer from slow sales or late payments. Consider the worst-case scenario and ensure you have the funds to cover unexpected bills or absent employees, as opposed to burying your head in the sand. Estimate how much money you expect to flow into and out of your business this Christmas. Staying on track should be easier with this.
Have the right trading terms to tackle late payments and non-payment of accounts:
It is important to master the art of payment discipline not only during the festive season, albeit throughout the whole year. Small business owners need to tackle unpaid invoices head-on if they want to maintain a positive cash flow. If you want something paid in time, you need to have a fair set of terms that suit both debtors and creditors and follow the routine.
Chase unpaid invoices:
It is much easier to manage cash flow if you are aware of your receivables. It is recommended to use a variety of mediums when pursuing an unpaid invoice. As the first step, try email; if that fails, you might want to consider phone calls. Give those who are struggling to pay up a payment plan in instalments and be understanding. Despite not being ideal, at least you’ll get paid eventually.
Communicate with customers:
Be sure to let your customers know when they need to pay you over the festival period. To avoid confusion, ensure you are clear about your working hours and delivery times. While it won’t make you popular, you may have to consider penalties for businesses that are trying to protect their own cash flow. Be upfront and clear about this.
Professional guidance:
As small business debt collection firms like eCollect specialize in credit management, they can provide valuable tips and expert advice to strengthen your company’s financial standing. Their services range from practical tips on how to get out of debt to effective strategies to increase cash flow. At the same time, they can give you suggestions on tools and other resources that will assist you in screening potential clients so that you will be able to easily spot those who might be slow payers.