Have you got a strategy for a financially stress free holiday period?
Holiday breaks are a time to re-charge for the year ahead. However, for a business owner, this time can be stressful without careful cash-flow planning. Have you got the strategies in place to ensure you are in the best financial position this year?
Holiday breaks are a time to spend with family, friends & have a chance to recharge for the year ahead. But, for a business owner this time can be stressful without careful cash flow planning. Even if you do continue to operate through the holiday shutdown season, your customers’ financial behavior may not remain the same.
It can be pretty disappointing to work hard all year only to find that once you have paid staff, overheads and creditors, you have little or nothing left in the bank to cover your own time off. The budget and forecasting process ensures you know your numbers and are prepared.
Why is cash-flow planning particularly important at this time of year?
Staff leave needs to be covered in addition to your normal fixed overheads like rent, creditors and tax compliance. If you are closed over the period, you will not be selling and your sales may take time to get started again in the new year.
Here are some simple strategies that can help:cashflo
- Decide your Christmas and holiday break dates – confirm with staff, customers and suppliers so that you can motivate customers to order early.
- Budget and plan for annual leave – pay rates may be higher than standard ordinary hourly rates, also factor in statutory public holidays.
- Decide on a leave payment strategy – will you pay out leave at the beginning of the Christmas break in full, or continue to pay as usual throughout the break?
- Review your work in progress (WIP) – plan to complete jobs or services that can be invoiced and paid before Christmas (remember if you don’t invoice and collect payment before Christmas, your clients are likely to go on break as well and you may not see the money until mid to late January).
- Put together a capacity plan – depending on the type of goods and services you deliver, there is generally a rush to get everything done before Christmas, whether it’s the kitchen bench-top installed or the beauty treatment before the break.
- Stock-take – Do you need to order in goods now to be able to complete work in progress? Check that there is stock on hand available now to see you through.
- Making an arrangement with the Tax Office – if you find you can not make payments, it is possible to apply for a payment arrangement. There are costs associated with this, however it may provide a solution that gets you through the holiday period. Talk to us, we can help.
Need financial support?
If you can’t make ends meet, now is the time to organise short term financial relief like an arranged overdraft of loan, rather than hoping it will come right.
Get in touch for help with cash-flow forecasting or assistance in applying for short-term finance to get you through the break.
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As 2017 comes to an end, it is the perfect time to reflect on the year that has been and the new year that is coming.
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From the team at GoFi8ure, we wish you and your loved ones a Merry Christmas and much success for 2018.
Whether you are starting up or already running a small business, you may avoid using software. This could be due to the cost, because you think it’s confusing, or you use an Accountant for tax and think software is unnecessary. But, what you may not know is accounting software can help you streamline your business and increase your bottom line. It helps ease the burden of financial administration, allowing you to focus on your business passion instead!
Here are the top 4 reasons why your business can benefit from accounting software.
1. Keep your Finger on the Pulse of your Business
How often do you review your financial information? By only looking at your financial information once a month or at GST time, you could miss seeing valuable information in a timely manner which may affect your business decisions.
2. Bring your Business to the Next Level
Are you still generating quotes using Microsoft Word templates? With accounting software you can create and send professional looking quotes to potential customers and when accepted convert the quote to an invoice then match the payment to the related invoice when payment arrives. This eliminates replicating data entry and reduces admin time.
3. Have Accurate Records for Tax Preparation
At tax time do you find yourself looking for your shoe-box full of receipts, trying to remember which expenses were business related? By keeping your records within an accounting system the end of year process can be less of a burden. You capture the correct information throughout the year and eliminate the need for the accountant to have to enter your data records into their tax system.
4. Control your Cash flow
Do you know how much money you can expect and what bills you will have to pay over the next 30 to 90 days? Every business needs to know what is coming in versus what is going out. Accounting software can provide you with cashflow reports, budgets and up to date profit and loss reports to ensure you can manage one of your businesses most valuable assets – cash!
Would you like to find out how GoFi8ure can help move your accounts onto life changing accounting software? Email us on firstname.lastname@example.org or call us on 0800 463 488 for your complimentary assessment today.
The holiday season is a tough time for business owners, not only have they just gotten through the last GST round, they have to cover wages, downtime and GST again in early January.
So, what can you do to avoid financial distress next holiday season?
Having a budget for the holidays will help you achieve the year-round goal of avoiding unnecessary and inefficient debt. You also need to think about your staff wages over the holidays, paying for public holidays and holiday pay.
Get your Bookkeeper or Accounts person to calculate your GST before you close for the holiday break. Don’t risk a late payment just because you are unprepared. You end up paying interest and penalty fees which could go on other expenses so do it before you go away.
Do you know what you can claim for? Just in case you had forgotten or were not aware, here is a quick summary of expenses you can claim for. An important thing to remember is: some expenses are 100% deductible while others are only 50% deductible.
Gifts to Staff – Each quarter or a year there is a fringe benefit tax (FBT) exemption of $300 per employee – as long as your gifts to staff are under $300 for October to December the costs will be 100% deductible. If they are over the $300 then FBT will be payable to Inland Revenue, however, the costs can still be claimed as well.
Cash Bonuses for Staff – These must be included in the employee’s wages for the week and PAYE paid on them.
Gifts of Food and Wine to Associates or Clients – The cost of gifting food and wine to associates or clients will normally be 50% deductible for tax purposes.
Other Gifts to Associates or Clients – The cost of gifts (other than food and beverages) to associates or clients will normally be 100% tax deductible for tax purposes.
If you need assistance with getting on track after the holiday season, the team at GoFi8ure can help. We have bookkeeping and accounting experts ready to help you get through the holiday season with less stress. Contact us via email email@example.com