Update 1 December
Keeping your business healthy and yourself in good cheer through the spikes and surprises of seasonal sales takes know-how.
How do you keep control of your cash flow and steer clear of those seasonal slumps? There are many tactics you can use in December and January to help with cash flow and manage the spikes. Here are 9 top tips for staying in charge of your cash flow.
1. Reduce payment terms and offer incentives
Research shows Australian small businesses are typically being paid 26 days late, so finding ways to encourage customers to pay on time around Christmas and New Year is particularly important. It’s the season to ask for earlier payments. If your terms are typically 14 days, take them down to 8; 30 days goes down to 14, as suggested by James Solomons of Xero. adding that providing incentives in the form of discounts for early payments is another means of getting dollars rolling your way.
2. Invoice immediately
Waste no time in sending out invoices or chasing up slow payers. Good accounting software lets you automate statements and friendly reminders. It should be set and forget. Make sure you’re on busy customers’ radars a few days ahead of payment being due. If a customer misses the payment date, a prompting phone call or SMS may help.
3. Make it easy for customers to pay you
Ensure you have adequate payment methods.
4. Watch out for spikes in demand
Online businesses inevitably have less control over demand than others, which makes predicting required stock levels at Christmas tricker. The must-have is a good inventory solution so you don’t sell something that isn’t available. Ask your suppliers for lead time well in advance.
5. Keep checking your web analytics
Beyond budget forecasting or looking back on last year’s trends, your website analytics deliver helpful clues for what’s happening now and what may happen next. Which pages are people visiting? At what point in the buying cycle are they dropping out?
6. Forecast and budget in detail
While some businesses scamper to keep up with demand, others may need to simply keep things ticking over. “You need a good handle on what’s going on for your business over the festive period. You may need to budget for a decrease in cash collections and an increase in outflows in the form of holiday pay, leave loadings or public holiday rates,” James points out. Do you need to close half the business for a couple of weeks or run it on a “skeleton staff”?
7. Have contingency cash
For businesses that foresee a cash shortfall, review your invoice factoring, where unpaid accounts are sold on to a third party at a discount, and having an amount of working capital to draw on.
8. Put peace of mind high on your agenda
Something that’s often overlooked is the emotional side of the business. Smart budgeting and forecasting makes for a better frame of mind and, ultimately, a better business.
9. Note down what you have learnt
Use the January downtime to make a few notes about what went right (and not so right!). This means months down the track when you’re planning the next festive season, you won’t just be looking at numbers.
Source and credit: Xero.com.au - article published by Paypa
The fourth claim period for JobMaker Hiring Credit payments is now open.
If your business is eligible:
Register – use ATO online services, online services for business or contact one of our team
Nominate your additional eligible employees – run payroll events through your Single Touch Payroll-enabled software
Claim – use ATO online services, online services for business, or contact one of our team
Eligible businesses can claim the JobMaker Hiring Credit for up to a year for each additional eligible employee hired between 7 October 2020 and 6 October 2021.
JobMaker Hiring Credit scheme – overview
Source and credit: ATO.gov.au
From 1 November 2021, if you employ new staff and they don't choose a super fund, you may need to request their existing super account ('stapled super fund') details from the ATO.
A stapled super fund is an existing super account linked, or 'stapled', to an employee so it follows them as they change jobs.
When a new employee starts, you need to:
offer them a choice of super fund if they're eligible to choose
request their stapled fund details from the ATO if they don't choose a fund.
This includes employees who aren’t eligible to choose a fund, such as:
employees covered by an enterprise agreement or workplace determination made before 1 January 2021.
You then pay their super contributions into one of the following:
the super fund the employee chooses
the stapled super fund the ATO have provided to you
your default fund (or another that meets the 'choice of fund' rules) if you can't pay into either of the above.
Before you can request an employee's stapled fund details, you need to submit a Tax file number declaration or a Single Touch Payroll event to establish an employment relationship.
While monitoring the requests, the ATO have seen circumstances where employers are requesting stapled super fund details incorrectly. Ensure you only request details for a new employee who's started on or after 1 November.
Source and credit: ATO.gov.au
Just a reminder that our office will be closed for Christmas from;
5.00 pm Wednesday 22nd December 2021 and reopening 8.30 am Thursday 6th January 2022
We wish you and your families a very peaceful Christmas and New Year.
If you wish to arrange a telephone appointment or zoom meeting with one of our team please contact our office either by telephone or email.
21 December 2021 November monthly BAS due