Coping With the New Year Cash Flow Crunch
Few things are as daunting as dealing with low cash flow in the first quarter of the new year. Use the following tips to help you handle the February cash flow crunch.
Get your invoices out before the holidays
Do what you can to keep your cashflow in check before the holidays by sending out any leftover invoices before the holidays and stick to your payment terms.Speed up your debt collection process
Chase up outstanding debt right away to stimulate your cash flow in the short term. In the long term, it can positively impact on your future cash flow.
Reduce your capital requirements
Keep your inventory small by ordering less stock more frequently. Invest in the stock that sells best at this time of the year and focus on those with a higher turnover and margin.
Speak to the tax man
If you're experiencing low cash flow and are faced with a huge BAS payment, speak to the Tax Office. They will happily work with you to secure an extension. Explain the efforts you have put in place to pay the debt off quickly and set aside 20-30% of your incoming payments for the next cycle so that you won't be caught off guard again.
Apply the lesson
Take what you learn to create a positive cash flow strategy for the future. The future of your business depends on how well you handle your cash flow. At the same time, you can alleviate plenty of stress, which will put you in a prime position to focus on your business' growth, rather than survival.
Understand your financing options
Financing companies can help you get over the holiday hump in no time. Get in touch today and we will see how we can help you.
Disclaimer: Information is of a general nature. Please consult your Account or Financial advisor for advice.