The good thing about coming back to work after your Christmas holiday is that everyone else has been away too. The bad thing, of course, is that cash has also been on holiday and no one has settled any invoices. Add in the fact that employees would have been scrambling to submit their expense claims so they’re reimbursed in time for Christmas, and the risk of a cashflow crisis looms large.
So, with apologies for the puns (it is Christmas, after all), here are our top tips for keeping cash flowing smoothly at the end of this year and the start of next.
Get Your Elves in Line
As the saying goes, it’s all in the preparation. Make sure everyone in your team is fully aware of the cashflow dangers at this time of year. Share your priorities so everyone knows what the aims and strategies are.
Christmas in November
If you usually send your invoices on the last working day of the month, it’s okay to send them earlier in December. After all, December is effectively a three-week month. If you’re concerned about doing this, simply add a little note to each customer’s invoice explaining your reason for invoicing early this month.
Whatever day of the month you send invoices, it’s especially important to make sure you follow them up at this time of year. You don’t want any invoices to get lost in your customers’ internal systems because it could result in a delay in payment you can’t afford. Remember, businesses will be closing early, so you’re well within your rights to chase early too.
Keep Checking That List, More Than Twice
When it comes to accounts payable, start chasing every department for any outstanding invoices now. Having a clear picture of upcoming invoices and when they need to be paid means you’re in a better position to plan January’s expenditure effectively.
Similarly, when it comes to outstanding employee expenses, start chasing them up now. It means you can reimburse employees earlier in the month rather than having them all concentrated in the week before Christmas.
When invoices and expenses do arrive in the department, don’t skimp on checking them. Now isn’t the time to miss a duplicate invoice or expense claim.
Think about how you can encourage people to pay promptly – or even early. The run up to Christmas is a busy time for everyone. A friendly face and a cheery voice may be more successful in getting you paid than a Scrooge-like approach.
If margins permit, consider offering a small discount to customers who pay before the end of the payment term. Having a couple of invoices paid early could make a big difference in those first couple of weeks of January when the risk of more going out than coming in is most acute.
Merry Christmas Everybody
By preparing the business’s finances for the Christmas shutdown in this way, you’ll be better prepared for the holiday season. You will also have laid all the groundwork for a less stressful January.
Remember too that finance automation is the way to keep cash flowing smoothly all year round because it gives you better visibility and greater control. Concur Invoice gives you the tools to stay on top of spend and pay invoices in a timely manner. Concur Expense gives you better visibility of what’s coming up and encourages employees to submit expenses regularly so there are fewer peaks and troughs.
To discuss how SAP Concur could help your business’s finances run more smoothly, get in touch.