The holiday season brings with it as many pressures as it does delights – for businesses as well as consumers. Christmas can be a tough time for your company when it comes to cash flow. How can you make sure you survive with your financial obligations met? What do you need to do to ensure everyone is happy this festive season? Here’s how you can get your finances sorted out before the holiday period so you don’t end up chasing a mountain of debt come January 2nd.
As your business puts its final hours in before the holiday shutdown, are you prepared for how your invoices and your debt obligations will be handled once business starts again in January? Everyone needs a break, but it is important not to neglect payroll and invoices during the run-up to the festive season so that you save yourself from stress and financial problems later. Small businesses can get into a problematic cycle if their festive cash flow is not managed correctly.
1. Send Invoices Early
Think about when you invoice clients during the run-up to Christmas. You may normally wait until the end of the month to send invoices, but you can do things differently and invoice when the work is done, before you leave the office for the Christmas break. Time is money, and if you get your invoices in early, they are more likely to be at the top of the pile when your clients sort out their bills in January. Leaving it until the 31st to send your invoices risks a long wait next year. If you’ve done the work, you should be entitled to the payment.
2. Chase Debts (Even at Christmas)
It’s great to be festive and wish your clients happy holidays, but don’t feel you have to let up on the bill chasing just because it’s nearly Christmas. Identify the invoices that are going past payment and chase them before the holidays. You may not get paid before Christmas, but you have set the wheels in motion to get your money first thing in January.
3. Prepare Your Processes
While it may be a little late to overhaul your financial processes for this month, look at how you can streamline operations to make next year more efficient and productive. For example, do you have a payroll operation set up to make your life easier and to free up your cash flow? An automated payroll outsourcing operation such as http://www.payrollsimply.co.uk/ can make it more likely that next Christmas will be a breeze.
4. Give Festive Bonuses
You may be in a position to reward prompt payers and people who consistently give you business with a small discount on their Christmas bill. A gesture of thanks to people who make your life easier will go a long way towards cementing positive business relationships in the new year and beyond.
Once you’ve done all you can to chase your invoices, follow up on late payments, give thanks to your best customers, and tidy your desk – take a deep breath and have a few well-deserved days out of the office. The rest of business can wait until the new year.
The Ideal Scenario in Recruitment from Outsourcing
If you have decided to leave your job to set up business on your own in the recruitment sector, you will only do it if you know the business intimately. You will need a little more than simply knowledge and that is a support system in place to ensure the efficient running of the operation guaranteeing compliance with statutory regulations and timely payment of staff. You should be able to create this ideal scenario by using an outsourced service provider.
The most important administrative task in recruitment is the payroll which is likely to be weekly if you are running a mix of weekly and monthly personnel. As long as you present the necessary details on time each week to the service provider, you shouldn’t need to worry about much else.
Tax and NI will be automatically deducted from the gross pay in each case with the total of those due and remitted to the ‘taxman’ and the staff receiving its money direct into their bank accounts. There will be a set deadline each week so that the BACS instruction can be sent to the individual banks for payment on Fridays.
At the same time the system will generate emails that are secured by password and sent to each employee.
Simultaneously, your service provider will raise the invoices to clients with timesheet evidence attached and send them off under the terms of your agreement with each client. The credit control function will be in the hands of your service provider but that is not to say you will have to wait for your money. You can access that immediately, net of VAT and the charge for that facility is identified when you negotiate the contract with your outsourcing specialist.
There is always the possibility of bad debt. You should have insurance in place to cover that; after all you will have received your invoice amount without the client having paid.
The secret behind outsourcing functions to an experienced company is having faith in its skills but also a reporting procedure so that you know what is going on at any time. Those reports should cover aspects such as gross sales, debtor accounts, profitability and cash received. You can expect money in your bank on a fixed day each week based upon the activity of the previous week.
There is a great deal of work here though much is a matter of simply pressing a button once the relevant data has been entered. It does involve accuracy and expertise with any problems resolved quickly. You should find you have more time to generate more business and that is where your energies should be focussed.
Setting up a recruitment agency requires more than just knowledge and experience of the industry. There are the practical issues that everyone faces when running a business and in recruitment nothing is more important than the payroll. It is something that can be taken out of your hands without the slightest of worries. You can see the details on a regular basis and the ‘taxman’ will never come calling.