Nicholas Kohler Director

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December 2015

Newsletter; Christmas cash flow reserves

Christmas cash flow reserves

Business typically slows down (except for segments like retail and hospitality) between Christmas and Australia day (coinciding with the school holidays) while many people are away on holiday. Businesses can run into financial difficulties over this period as the seasonal shut down takes over and the normal cycle of cash collection is disrupted. A significant number of businesses ensure that they have cash reserves over the holiday period to cover staff wage costs and other expenses as cash flow problems arise due to both:
- customers paying late due to their own cash flow problems or going on holiday before making payments;
- suppliers going on holiday which affects sales and the ability to plan work.
Just remember that the ATO doesn’t take any holidays, so try and avoid dipping into your GST account!

Seasonal ups and downs are part of business but be you should be prepared for customers to disappear while they are on holidays over the next month. If all your customers are on holidays and you’re not going to be busy then you might consider taking some time off too as there may not be much to gain by keeping your business open and incurring costs. Running a business is a challenge and you need to ensure that you and your staff schedule in time to relax, have fun and partake in the festivities. It’s also a good time to create a sales forecast and establish targets so you have a plan to prosper in the New Year.

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