Financial Planning for the Holiday Break

Posted by Natalia Atapina on Dec 7, 2018 9:00:00 AM

In Bookkeeping, Budget, Business, cash flow, Planning, Profit and Loss, Spending

There is so much to organise to be ready to close up shop over the holidays. Planning and scheduling now can save you a lot of headaches on your return and save you disruptions throughout your break.

  • Financial review: According to your P&L from previous years, how lucrative is your business around this time of year? While you are certainly deserving of a quiet break, do your financial records suggest you should remain operating as much as possible over the holiday period then schedule some time in a few months to relax and unwind? Perhaps you traditionally have a quiet start to the year- have you planned your staffing requirements around this? While you should be reviewing your financial situation weekly or at the very least monthly, now is the time to get out the fine-toothed comb.
  • Cash Flow: If your regular bookkeeper will be on break for a few weeks, ensure you are across the cash flow forecast leading well into next year. Are there bills or wages that need to be paid while everyone is away? Do you have enough cash in reserve to cover these? Schedule these payments via your online banking or set reminders for yourself to fix them up at intervals over the holidays. If sales may be slow on your return, plan your dollars aroundhis too. A follow up to your overdue debtors may also assist in topping up the cash flow during your down time. If you find yourself coming up short, it might be worthwhile offering an end of year opportunity to all debtors (overdue or otherwise) to fix up prior to Christmas to receive a 5% or 10% saving. While it is not ideal to reduce future dollars into the business, this potential influx could get you over the holiday hurdle and it’s a nice little thank you to your customers who would be looking that little bit harder to save at this time of year.

 

  • Your Team: While an ideal situation would allow you to throw a great Christmas staff party and give bonuses to each member of your team, sometimes it’s just not in the budget. Consider other ways to show your appreciation; at the very least honestly and openly acknowledge the individuals that help you drive your business forward to let them know they are valued. Encouraging a “secret Santa” exchange or a potluck social gathering may be another way to get everyone into the holiday spirit without breaking the bank.

 

  • Suppliers: Do you know when your major suppliers are on break? Do a stocktake taking into consideration sales for the first few weeks back. While you do not want to be overstocked, you also do not want to be caught short waiting for a delivery.

 

  • Lastly, don’t be tempted to dig into your “rainy day” fund to get you through the holidays. Client or team gifts, parties, etc should have been included in your budget and forecasting. Imagine using these dollars for something fun only to have your vehicle break down or worse and not have the funds left to cover it. Leave it for its singular purpose.Have a great holiday break!
    Contact us if you need any further assistance.