The month of December is the most pivotal month of the year for many companies. With many companies closing their doors between Christmas and New Year's Day, year-end payments are often not processed until mid to late January. This can create a major strain on businesses struggling to maintain sufficient cash flow to cover expenses that must be paid by the end of the fiscal year.
The Importance of Healthy Cash Flow During the Christmas Period
December is full of extra expenses that companies do not have to face during the other months of the year. In addition to standard payroll, businesses face a host of other expenses that can strain a company’s finances. Below are three key reasons why companies must ensure that they have a healthy cash flow during the Christmas period:
Many companies pay annual employee bonuses in December
Businesses often have outstanding bills of their own that must be paid
Incoming revenue streams are reduced due to company closures around Christmas time
Steps to Optimizing Your Cash Flow at Christmas
1. Begin to follow up on outstanding receivables as early as possible
2. Proactively target customers with a history of delayed payments
3. Offer incentives to customers who pay in advance
4. Send a letter before action by email
5. Seek the guidance of an experienced debt recovery specialist
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