Christmas Cashflow Planning for Contractors
Christmas cashflow planning for contractors can be especially challenging.
The festivities can alter your usual working routine, and will often require some precautionary measures to keep everything ticking over.
Reduced client activity
Many businesses will cease or limit activity for days or even weeks over the Christmas period, so it’s unlikely that you’ll be bringing in much new work.
As a contractor relying on a regular source of income, this could prove problematic. To overcome this factor, you should build sufficient contingency into your cash flow to cover your business expenditure for around three weeks.
This should ensure that you have enough capital built up to ride out the Christmas shutdown and slower periods at the end of December and start of January.
Chasing outstanding invoices
As operations slow down over Christmas, clients may forget about due payments, or even seek to postpone them until January to build up their own cash buffer.
It’s important to identify potential late payers well in advance of the Christmas break, and set about reminding them of any outstanding or upcoming invoices.
These programmes enable you to:
- Track upcoming, due and outstanding invoices at-a-glance
- Automatically send out a series of invoices and payment reminders
- Give clients a convenient means of settling the payment online
Christmas can be a difficult time for contractors. But, by making the relevant preparations in advance, you can ride out the disruption and look forward to a bright start in 2017.
Call on 3 Wise Bears this Christmas and get expert advice on cashflow planning for contractors.