TLC Top Tips… Getting your Christmas cashflow in shape
4th November 2016
Gosh, is it really November already? No doubt the C word has started to creep into your head – presents, which relatives are visiting and when, do you go for traditional turkey or something different?
From a business point of view there are some things you should do to prepare for the festive season too. Many SMEs find cash-flow is a little difficult over December and January so here are a few practical tips to help you smooth out any wrinkles in your bank balance.
1 Corporation Tax – look at your position now (give us a call if you need a reminder). If your year end is March (as many businesses are) you’ll need to pay your corp tax liability for the trading year before by 1 Jan. This can then also be followed by a personal self-assessment tax bill 31 January. We always advise it’s best to save for this throughout the year, but if you haven’t, at least you can look at setting aside some money now.
2 VAT – Remember payments will also be due in January for the quarter ending 30 November, so the same thing applies. Save now if you haven’t already started.
3 Debtors – Start chasing ASAP. If you’d feel uncomfortable approaching a client with outstanding invoices – or already have and are getting nowhere – we can recommend a debt recovery agency who can handle that for a small fee. Many of our clients use these companies with great success and no damage to the client relationship.
4 Invoice terms – look carefully at both yours and those of your suppliers. If you usually pay early you could stretch this out a little? And do your invoice terms need shortening to take account of the Christmas break? Just make sure to flag this up clearly if you’re making changes.
5 Big purchases – Put off what you can until February or March as this will smooth your cash-flow situation. Just make sure you make the purchase before your year end to get the benefit of off-setting the cost against tax as soon as possible
You’re probably also thinking about your office Christmas party. Check out our blog for advice what you can and can’t claim as a business expense for this.
As always, if you have any queries, give one of the friendly team a call.