By Daniel Hunter
Despite the less than festive assessment of the economy in the recent Autumn Statement, the UK is still breaking out the decorations and heading to the shops for the all-important Christmas break.
And while most of us are looking forward to some time off work and a few days of feasting, businesses will be hoping they will be busier than ever to make up for a difficult year.
Bibby Financial Services is offering a few festive business tips to help firms at this time year, as one of the biggest problems going into the New Year is excess stock from over estimating Christmas demand. This can lead to businesses struggling to maintain financial liquidity at the turn of the year as cash flow gets tied up in unsold stock.
In addition, research by Bibby Financial Services carried out during the third quarter of 2012 found that 37 per cent of business owners consider late payment to be a major challenge facing their businesses. In fact one-in-five owners and managers on average have to wait up to a further month past due date until they receive final payment.
Because of this, it is important for firms to plan to cover costs and maintain a strong cash flow. So to help steer businesses in the right direction for the New Year, here are a few suggested top tips:
· It is important to plan cash flow carefully given the dip in sales and the elongated time it takes for some customers to pay in January
· Ensure customer invoices are sent out promptly and correctly ahead of the Christmas period
· Make sure invoices are chased for payment and keep pursuing to bring in as much cash as possible before the start of 2013
· Make your payment terms clear with any new suppliers
· Tighten up credit management processes to help keep cash flowing
· Renegotiate terms with suppliers if you have the opportunity and shop around, to ensure the best deal to keep outlay to a minimum
· Free up valuable management time by providing a dedicated credit control team to chase and collect outstanding invoices on behalf of the company
Edward Winterton, commercial director of Bibby Financial Services, says: “The run up to Christmas is always a time when owners and managers feel the most pressure in all aspects of their operations. For many businesses, there will be a concerted effort to bring in as much sales revenue as possible before their books close at the end of December.
“To help support this process and maintain the smooth running of finances in to the New Year, it is worth exploring the flexible funding solutions provided by independent invoice finance providers such as Bibby Financial Services.
“This will give businesses the necessary support they need, allowing them to enjoy the Christmas period and return to work in January well prepared for running and growing their business in 2013.”