Avoid Christmas Cash Crisis
Thursday, December 01, 2005
Companies holding back payment to improve their end of year figures could have serious repercussions for small firms that are reliant on cash coming in.
A little forward planning by businesses can go a long way to ensure that, as far as cash flow is concerned, they start the New Year on the right foot. It is recommended that businesses identify those customers whose credit periods expire over the holiday season and issue appropriate reminder letters to ensure that payment is received on time.
Here is a list of 10 top tips to help companies enjoy a happy Christmas having been paid on time and settled all their own outstanding debts:
- Ensure you are aware of your major customers' Christmas opening hours to avoid wasting time when chasing payments
- If payments from customers are due during close-down periods, attempt to negotiate earlier payment dates
- Do not let credit limits get out of hand because of extended payment times over the December and January period
- Do not get behind with your own invoice and statement schedules over the Christmas period
- New customers seeking large credit facilities over the Christmas period may be hunting for credit from unsuspecting (and busy) suppliers
- Ensure you obtain as much information on new accounts, including credit checks, no matter how busy you are
- Do not supply new goods or services if your customer has exceeded reasonable overdue periods, regardless of their credit limit
- Plan and budget your own expenditure over this period because, inevitably, payment terms can be disrupted over December and early January
- Take action on those accounts that are beyond credit limits now. Do not wait until the New Year when your debtors will have other pressures
- Use the quiet, close-down period to review your terms and conditions, ensuring they are up-to-date and that they include reference to interest terms
Related: Get Your Business Holiday Ready
Tags: holiday ready, christmas, cash+flow
posted at 8:33 AM
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