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Don’t let these common cash flow drains and challenges hold your business back this silly season.

 

One thing is for certain, ’tis the season for feeling the cash flow crunch – for many small businesses, anyway!

As Christmas approaches so, too, does the seasonal rocky road of lumpy payroll and irregular cash commitments. This lumpy cash flow for many small and medium sized businesses in the workforce industry can make life difficult. The gap between your end customer paying and your growing payroll commitments can widen, while your own expenses can quickly rack up despite sales dropping.

If you’re like most business owners at this time of year, you’ll know a smooth and reliable level of working capital is essential for ongoing success.

After all, this is a time to consolidate any business growth you experienced in 2016, and position yourself to build further as the New Year rolls around.

To help, here’s how to avoid getting caught out by these common cash drains leading up to Christmas.

Leave Accruals

Most businesses experience an increase in staff taking annual leave at this time of year, which means even though your sales might drop, your payroll commitments remain steady – and in many cases rise with additional leave accruals. Invoice Finance can help advance the cash you need to cover annual leave payments so that you don’t have to trade in a negative cash cycle during summer.

Seasonal Income

Whether you’re in recruitment, labour hire, contracting, professional services, traffic management or equipment operations this time of year can see a drop in sales. This means you must carefully manage your expenses. Taking advantage of invoice finance is an easy way to ensure funds are always available to sustain your business during a time when income can vary.

Late Paying Customers

The closer we get to Christmas; the more likely customers are to hold off making payments, as many choose to settle invoices once they return to business in the New year. This can cripple some SME businesses, especially if you’re relying on these funds to meet your own payroll and other overhead commitments. That’s why APositive offers a flexible range of workforce finance solutions to help businesses like yours plug the cash flow gap.

ATO Commitments

No matter what your cash flow is like during the silly season, your commitment to the Australian Tax Office must be maintained. You can manage your BAS and PAYG instalments from any device by signing into your myGov account and accessing ATO services. So, even if you’re away from the office, you can view, lodge, revise, vary and pay your BAS, and manage your PAYG instalments, including elections, voluntary entry and real-time exits.

Personal Allowances

As directors take holidays and spend time with family and friends, they often need cash to fund personal festivities. Using invoice finance can help maintain a steady (and reliable) working capital and allow directors to draw on some of their hard-earned dividends at a time when these personal expenses may increase.

To understand more about the benefits of using invoice finance and payroll funding to help your business grow visit APositive.

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