{"id":3354,"date":"2020-12-05T16:58:01","date_gmt":"2020-12-05T16:58:01","guid":{"rendered":"https:\/\/www.sage.com\/en-gb\/blog\/?p=3354"},"modified":"2026-01-30T10:52:45","modified_gmt":"2026-01-30T10:52:45","slug":"avoid-christmas-cash-flow-woes","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-gb\/blog\/avoid-christmas-cash-flow-woes\/","title":{"rendered":"8 simple ways to avoid Christmas cash flow woes"},"content":{"rendered":"
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\n\t\t\t\t\t\t\tMoney Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t
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\n\t\t\t\t\t\t8 simple ways to avoid Christmas cash flow woes\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t

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\n\t\t\t\n\t\t\t\t\"\"\t\t\t\tConrad Ford<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n

Christmas is an important time of year for firms all over the UK, whether you need to gear up for your busiest period or batten down the hatches for a quiet period in trading.<\/p>\n\n\n\n

Either way, it\u2019s likely that the festive season presents some alternative challenges (in addition to the likes of the impact of coronavirus) to the rest of the year, so you\u2019ll need to plan carefully to make sure you don\u2019t get caught out.<\/p>\n\n\n\n

Here are eight tips that could help you avoid any Christmas cash flow woes.<\/p>\n\n\n\n

1. Forecast your cash flow<\/strong><\/h2>\n\n\n\n

You may already have a process in place for cash flow<\/a> forecasting per quarter or even per month. If so, this will stand you in good stead. But many firms don\u2019t forecast cash flow<\/a>, or they do so erratically.<\/p>\n\n\n\n

At a less predictable time of year, it\u2019s worth understanding a few different scenarios to see what happens in the best and worst case. That way, if you end up needing to go to Plan B, you\u2019ll already have an idea of the figures involved.<\/p>\n\n\n\n

2. Prepare for your tax bill<\/strong><\/h2>\n\n\n\n

Many firms will pay corporation tax in January, which can be a big hit to your cash flow if the coffers are already depleted.<\/p>\n\n\n\n

Tackling this problem early could make a big difference in the new year, whether that means putting some extra cash aside or perhaps thinking about external funding.<\/p>\n\n\n\n

There are some business loans on the market specifically designed to finance a tax or VAT bill<\/a>, which might be a good option for your firm if you\u2019re scraping the barrel by January.<\/p>\n\n\n\n

3. Plan for employee absences<\/strong><\/h2>\n\n\n\n

Whether it\u2019s planned annual leave, winter illness or just Christmas party hangovers (yes, this can still happen if you throw a virtual party), you\u2019ll probably find that your staff absences increase at this time of year.<\/p>\n\n\n\n

And bear in mind that whatever your firm is experiencing, others may be too \u2013 which could mean the normally reliable person on the other end of the phone isn\u2019t available as much as you expect for the rest of the year.<\/p>\n\n\n\n

It\u2019s a good idea to factor this into your financial planning, which might mean adding a couple of days\u2019 buffer to your delivery deadlines, ordering stock early<\/a>, or even hiring temporary staff if Christmas leads to particularly high demand in your sector.<\/p>\n\n\n\n

Whatever happens, you can guarantee that Christmas and the new year are some of the most volatile times of year for your workforce. So make sure it doesn\u2019t have a knock-on effect on your cash flow.<\/p>\n\n\n\n

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A free guide to managing your cash flow<\/h2>\n\n\t\t\t\t\t\t\t\t\t
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Our guide is packed with expert advice to help you stay on top of your cash flow.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\tGet your free guide<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\"\"\t\t\t<\/div>\n<\/div>\n\n\n\n

4. Stay on top of your invoicing<\/strong><\/h2>\n\n\n\n

Any business that deals with purchase orders and invoices <\/a>should be paying extra attention at this time of year.<\/p>\n\n\n\n

Many companies will be disrupted over Christmas, which means the chances of a missed payment, delayed invoice<\/a>, or misplaced order are higher. And this is doubly important if your own business\u2019s cash flow is more fragile than normal.<\/p>\n\n\n\n

Keep the lines of communication open with your customers and suppliers to make sure everything is going smoothly because a bump in the supply chain can have a nasty effect over Christmas.<\/p>\n\n\n\n

And if everything is going well after all, you can use the phone call as an opportunity to wish your loyal business associates a Merry Christmas!<\/p>\n\n\n\n

5. Don\u2019t forget about irregular payments<\/strong><\/h2>\n\n\n\n

From an HR point of view, Christmas presents some unique challenges. You may choose to pay for a virtual staff party and many firms will also run payroll early.<\/p>\n\n\n\n

Combine those with late payments<\/a> and a quiet period in trading, and you could end up with some cash flow problems on your hands.<\/p>\n\n\n\n

Keep these things at the front of your mind. Not only are they some of the biggest Christmas cash flow challenges but they also have a big impact on staff morale at a time of year when you may rely on your staff the most.<\/p>\n\n\n\n

6. Keep your books clean<\/strong><\/h2>\n\n\n\n

You\u2019ve probably noticed that the common theme at Christmas is disruption, which means it\u2019s easy to spend your time fighting fires and end up neglecting the mundane but important administrative tasks.<\/p>\n\n\n\n

But there are two reasons to make sure the paperwork is getting the proper care and attention.<\/p>\n\n\n\n

The first is that if your books are shipshape and Bristol fashion, any irregularities should be easier to spot \u2013 and at a tricky time of year, it\u2019s easier to prevent a problem than to solve one.<\/p>\n\n\n\n

Second, if you do decide to explore business finance to help with your Christmas cash flow, having the paperwork ready will make the process significantly quicker and easier.<\/p>\n\n\n\n

7. Check your loan options<\/strong><\/h2>\n\n\n\n

For some of these issues, you might decide to get a business loan or other form of finance<\/a>. But even if you\u2019re not sure, it pays to do some preliminary research. That way, you can move quickly when a clear need for funding arises.<\/p>\n\n\n\n

There are lots of different products on the market that could help you cover a seasonal cash flow requirement but there are a few rules of thumb that apply to most of them.<\/p>\n\n\n\n

Even something as simple as having bank statements and directors\u2019 details ready can mean your loan application goes from days to hours, so being prepared can make all the difference if you decide to go ahead.<\/p>\n\n\n\n

8. Don\u2019t forget to enjoy Christmas<\/strong><\/h2>\n\n\n\n

In the whirlwind of running a company, burnout is a real issue \u2013 but it can sometimes be difficult to see the signs in yourself. It might not have a direct impact on cash flow but it\u2019s incredibly important to look after yourself and take the time you need to relax and recharge, even just for a couple of days.<\/p>\n\n\n\n

If you\u2019re calm and well rested, you\u2019ll be better equipped to deal with any Christmas cash flow woes that come up, which will mean a happier festive season for you, your staff and your customers.<\/p>\n\n\n\n

Editor’s note: This article was first published in December 2017 and has been updated for relevance.<\/em><\/p>\n\n\n\n

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The business-savvy guide to seasonal selling<\/h2>\n\n\t\t\t\t\t\t\t\t\t
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Discover important trading dates for your business \u2013 including new ways to help you take advantage of popular selling days throughout the year.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\tGet the guide<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\"\"\t\t\t<\/div>\n<\/div>\n\n\n

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Join more than 500,000 UK readers and get the best business admin strategies and tactics, as well as actionable advice to help your company thrive, in your inbox every month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\tSubscribe now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\"\"\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Christmas is an important time of year for firms all over the UK, whether you need to gear up for your busiest period or batten down the hatches for a quiet period in trading. Either way, it\u2019s likely that the festive season presents some alternative challenges (in addition to the likes of the impact of […]<\/p>\n","protected":false},"author":165,"featured_media":11584,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[6],"tags":[24,25],"business_type":[4,3],"lilypad":[],"context":[],"industry":[],"persona":[71,73,74,75],"imagine_tag":[96,109],"coauthors":[392],"class_list":["post-3354","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","tag-cash-flow","tag-make-receive-payments","business_type-small-business","business_type-medium-sized-business"],"sage_meta":{"region":"en-gb","author_name":"Conrad Ford","featured_image":"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2022\/04\/GettyImages-656336020.jpg","imagine_tags":{"96":"Medium businesses","109":"Small business"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice UK","distributor_original_site_url":"https:\/\/www.sage.com\/en-gb\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/posts\/3354","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/users\/165"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/comments?post=3354"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/posts\/3354\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/media\/11584"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/media?parent=3354"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/categories?post=3354"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/tags?post=3354"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/business_type?post=3354"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/lilypad?post=3354"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/context?post=3354"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/industry?post=3354"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/persona?post=3354"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/imagine_tag?post=3354"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/coauthors?post=3354"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}