Manage your Cash Flow over the Christmas Quiet Period

December 13, 2022
manage cash flow

Christmas is well and truly upon us. Whilst some businesses may be planning their office Christmas parties, others may be thinking about their upcoming downturn in cash flow. 

For some businesses, Christmas is a mad flurry of activity – namely in the retail and hospitality sectors. But for many, the December and January period is a slow one. 

Many see their sales and customers dramatically slow over the holiday period. This in turn has a direct impact on cash flow – it dries up. 

So, whilst we don’t want to be the Christmas Scrooge, it is worth putting some plans in place now so that come Christmas, your downturn in cash flow doesn’t knock you, or your business for six.  

Here are some tips on how to survive the Christmas cash flow crunch. 


Make a game plan 

There’s never any harm in being too organised. So, to keep you out of trouble this festive season, try making a detailed cash flow plan that takes you through to February. 

This will be a good starting point to determine whether you are likely to have cash flow problems and how serious they might be. 


Do your homework

Many businesses close over the Christmas period so it pays to look into your customer’s closing times and whether any of your invoices will be due over this period. If so, talk to them about arranging payment before they close. 

Alternatively, even if the business isn’t closing, their accounts person may be going on holiday over the break. Make sure you find out who you can contact during this period, otherwise you may have to wait for them to get back to have your invoice paid. 

If this is an awkward conversation for you to have, engage your bookkeeper or accountant to do the Christmas invoice chasing. 


Invoice early

Another great way to keep the cash flowing in your business over Christmas is to ensure your invoices are sent to customers as early as possible.

As many businesses close down over the Christmas period, payments to creditors are likely to be made by 16 December or after 9 January. The sooner you can invoice your services out in December, the more likely you’ll be paid before Christmas.


Don’t pay your own invoices sooner than needed

Managing cash flow effectively is about more than bringing payments in on time. You also need to fight your corner and secure the best possible terms from your own creditors.

So before you knock off for the Christmas break, review the terms your own suppliers give you. Push them for the payment window available and don’t pay any invoice before you need to – unless there is an incentive such as a discount for early payment to do so.

When it comes to regular suppliers, don’t be shy about using your credentials as a repeat customer for leverage.

This will help keep your cash flow at a maximum, leaving time for your customers’ payments to come through. 

Managing cash flow in a seasonal business

Christmas cash flow problems affect many SMEs, but the issue can be especially challenging for seasonal businesses. Sharp spikes in customer demand make it difficult to hold sufficient stock, but overbuying can leave you unable to meet your financial obligations. 

Equally, it can be easy to run out of ready funds in the lean out-of-season spells.


It’s a challenge that requires foresight and planning. Savvy seasonal-business owners keep meticulous records to serve as a roadmap in future years. Statistics can be confusing but look for broad trends and project forward accordingly.


Smarten up for the future

If you find yourself spending inordinate amounts of time chasing late payments and rushing to prepare for the Christmas shutdown, get your business ready for 2023 now.

Small businesses should set aside time to critically review costs to see if there’s room for greater efficiencies. 

This could involve automating tools to help manage cash forecasting or setting up a savings account specifically for this time of year. 


We can help 

Here at MBC Group Services, we understand the stress that comes with cash flow issues, especially at a time like Christmas when expenses are already high. 

We can help. We offer a range of business and financial services to help you and your business plan for the Christmas quiet season. Get in touch today.