Don't run out of cash when the holiday period starts!
Tips on avoiding late payments over holiday periods
Protect your cash flow over the holiday period by keeping a close eye on payment dates so you can pre-empt any problems. The last thing you need is a large outstanding invoice and the only person who signs the cheques is out of the office for 2 weeks. By planning ahead you can avoid this headache and ensure your cash flow doesn’t suffer terminal damage over the Christmas and New Year break.
It’s not just Christmas that can cause payment problems. Summer holidays and Easter cause their own problems with many of the staff taking holidays at this time, or even the firm itself closing down for a week or more. Watch out for other religious festivals too, such as Chinese New Year, Ramadan and Yom Kippur, as these can cause similar problems with receiving payment of your invoices due to key staff being out of the office.
Simple steps to help avoid late payments
Here are some simple steps to take to avoid any payment problems holiday periods might cause:
- Raising invoices that fall due to be paid on 25 December or 1 January is asking for trouble. Even payment dates 2 or 3 days either side of these could cause delays in your business getting paid so make sure you make the necessary adjustments to the ‘payment is due by’ dates on all your invoices.
- Monitor payments received and payments due on a daily basis.
- Get to know which customers pay early, on time and late so you know who to start chasing, and when.
- Identify your largest invoice/biggest risk and call them personally to make sure the payment will be processed in time. Chances are they won’t have made arrangements to accommodate staff being off or them being closed for business, so a gentle reminder from you might be very well timed!
- Now more than ever, don’t be afraid to ask for payment – “It’s Christmas and I expect your staff will be taking some time off so I just want to check when you will be paying our invoice please.”
- Watch out for new customers seeking large credit facilities over holiday periods, they could be fraudsters looking to take advantage of lax credit checking processes.
- Plan and budget your own expenditure over this period to take account of slower payers.
Don't run out of cash when the holiday period starts!
Tips on avoiding late payments over holiday periods
Protect your cash flow over the holiday period by keeping a close eye on payment dates so you can pre-empt any problems. The last thing you need is a large outstanding invoice and the only person who signs the cheques is out of the office for 2 weeks. By planning ahead you can avoid this headache and ensure your cash flow doesn’t suffer terminal damage over the Christmas and New Year break.
It’s not just Christmas that can cause payment problems. Summer holidays and Easter cause their own problems with many of the staff taking holidays at this time, or even the firm itself closing down for a week or more. Watch out for other religious festivals too, such as Chinese New Year, Ramadan and Yom Kippur, as these can cause similar problems with receiving payment of your invoices due to key staff being out of the office.
Simple steps to help avoid late payments
Here are some simple steps to take to avoid any payment problems holiday periods might cause:
- Raising invoices that fall due to be paid on 25 December or 1 January is asking for trouble. Even payment dates 2 or 3 days either side of these could cause delays in your business getting paid so make sure you make the necessary adjustments to the ‘payment is due by’ dates on all your invoices.
- Monitor payments received and payments due on a daily basis.
- Get to know which customers pay early, on time and late so you know who to start chasing, and when.
- Identify your largest invoice/biggest risk and call them personally to make sure the payment will be processed in time. Chances are they won’t have made arrangements to accommodate staff being off or them being closed for business, so a gentle reminder from you might be very well timed!
- Now more than ever, don’t be afraid to ask for payment – “It’s Christmas and I expect your staff will be taking some time off so I just want to check when you will be paying our invoice please.”
- Watch out for new customers seeking large credit facilities over holiday periods, they could be fraudsters looking to take advantage of lax credit checking processes.
- Plan and budget your own expenditure over this period to take account of slower payers.