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For the retail & hospitality industries, Christmas is a busy time, but for most other businesses sales begin to decline, cash flow slows down and customers take longer to pay.
The impact of the slowdown in cash flow during the holiday season often continues until the end of the first quarter as spending capabilities are limited due to maxed-out credit cards, back-to-school expenses, and other financial obligations.
Your business may find itself in financial difficulties if you fail to boost cash flow well in time for the holiday season. In this article, we will explain simple tactics to boost your business cash flow and how to get paid on time during the holiday season.
Cash Flow Boosting Tips
Here are some ideas you can make use of to boost sales during the holiday season.
Make Irresistible Offers: According to a study conducted by Roy Morgan, retail sales during the 2019 Christmas season is forecasted to be over $52.7 billion. The holiday season provides the perfect opportunity to boost your marketing campaigns for meeting the demand from customers hungry for a great deal.
If you are a service provider, improve the customer experience by building on the relationship. Offer after-hours service or a holiday-special “thank-you” offer.
For example, a cleaning business can offer to perform a complimentary cleaning if the customer prepays for two or more services in the New Year.
Introduce Loyalty Programs: This is the perfect time to introduce customer loyalty programs. Not only does it allow you to show loyal customers you care about them, but it also helps in boosting cash flow through recurring sales in your business.
Stock Up on Popular Items: Make sure you have sufficient stock of your most popular items, so you don’t run out of them when the demand peaks. Revisit the previous year’s holiday season sales to forecast how many units of popular products you will need.
Position popular products in a way that makes it easy to be found. If you have an online store, use banners and position them on your website so they immediately catch a website visitor’s attention.
On the other hand, if you have a physical store, place the items near the entrance or checkout counter. You can also put up some signs to draw a customer’s attention to the products.
Stand out with a professional website: Although your website may not require all the bells and whistles of household brands, a professional website is quite affordable and worth investing in. Trust is the new currency online, and if your website looks unprofessional and is hard to navigate, it’s not likely to give customers the confidence to buy. When designing your website, make sure it is mobile-friendly, as this will make it easier to keep up with traffic spikes and regularly promote special offers.
Managing Business Cash Flow
Whether you operate online or offline, managing cash flow during the holiday season is important to keep your business financially healthy.
Here are a few suggestions to help you keep cash flow under control this holiday season:
Get your Invoices Out on Time: Send out invoices to clients a little ahead of time, instead of waiting until month-end. Make it clear when you expect to get paid by ensuring payment terms are stated on invoices.When fulfilling orders, focus on the ones which can be completed the fastest, while scheduling others which take time to complete for early in the New Year.
Follow up On Payments: Set clear expectations with customers that they need to pay on time in accordance with pre-arranged credit terms.
Customers with a tendency for slow payment should be contacted a few days prior to the invoice due date to confirm they will be paying on time. Calling customers is a more effective option than emailing.
Cash Flow Forecast: Setting up a cash flow forecast is essential to weathering the ups and downs of your business and project future profitability.
Once you have a realistic budget set for the New Year, you can put your mind at ease knowing that your cash flow is under control.
Use a Debtor Financing Arrangement to Buffer Slow Payments
Despite your best efforts, you may face cash flow shortages during the holiday season. Debtor financing can help in accessing cash quickly and take away the pressure of chasing payments.
Debtor financing is designed to turn unpaid invoices into cash enabling you to pay suppliers and meet other operating expenses.
BCashflow Positive debtor financing can help your business avoid cash flow shortage by advancing up to 90% of the invoice value in as quick as 4 hours once a facility is in place, and the remaining 10% is credited to you when your customer pays us.
There is no fee to apply for debtor financing with BCashflow Positive and our charges are fully transparent, so you know exactly how much you will pay. If you’re looking to have fast access to cash locked up in your invoices this holiday season, don’t delay, call us on 1300 937 292 for more details or CLICK HERE to get a quote.
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Traditional lenders were unable to deal with the uncertainty and risks.
BCashflow Positive understood the risk and assisted us with our cash flow, which was great❞Financial Controller, Solar Manufacturing Company, WA
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