The Christmas decorations are already out in the shops, and we’re starting to think about the holidays. 

Christmas can be an expensive time of the year.  Between the gifts, the parties and the visitors to your home, it can really take a toll on the family bank balance.  But your business bank balance is affected by a few different factors.

It may be that you shut down your business for a week or two, or that your customers or suppliers shut down their businesses.  Either way, as a business owner, Christmas may mean an impending cash flow crisis.

But this isn’t cause for panic, just yet.  Here are my three tips to help you avoid a Christmas cash flow catastrophe!

TIP 1 | Talk to your customers or clients

Clients can help with your cash flow if you have a conversation with them now. Let them know that you’re planning ahead and ask them to pay their invoices before they shut down or consider a part payment with the balance when they’re back at work. 

If someone is due to be invoiced during the Christmas break, give them a call and ask if it’s OK if you invoice them early so it can be paid by the due date before all their team goes on leave.

Chasing up outstanding invoices and getting them paid before the Christmas shut down will allow you to have a sustainable amount of cash to get you through the holidays.

TIP 2 | Talk to your suppliers

This is the same as tip #1, except in reverse. This time you want to talk to your suppliers regarding extended credit terms so that you can pay your bills later than they are due without any “penalty”.

The supplier may ask for a part payment before the holidays with the balance payable when you’re back. Exactly the same deal you’ve offered your clients.

The more business you have with a supplier and the length of your relationship will allow greater negotiating power.  And any concession or change of terms is a great thing for your cash flow.

TIP 3 | Prepare a weekly cash flow forecast

A cash flow forecast is an important document to have all year round, but it becomes even more important during times of business cash flow disruption.

To keep a close eye on your cash flow over the coming months you should prepare a detailed cash flow forecast. 


Start by listing all your clients or customers, when they’ve said they’ll pay and how much. This will be easy to do once you’ve had the conversations as per Tip 1.

Next, add onto the list any other income based on your conservative best guess. For those of you with online stores, this could be continuing sales over the Christmas period; and for others, it could be new customer prepayments.  List anything you reasonably expect to receive.


After you’ve run through Tip 2 and spoke to all your suppliers.  Record the dates and amounts that you’ve agreed to pay them.

Next list down all the regular expenses with amounts and due dates. This could include monthly subscriptions that are automatically debited from your account.  It also needs to include wages, rent, taxes – all of which need to be paid on time to avoid penalties. These are the expense payments that you just can’t delay.


Now starting with your current combined bank balances, you’ll be able to track your cash flow week by week.  

Start with the opening balance, add the income and then deduct all expenses for that week.  This will give you the closing weekly balance. Is there a shortfall in any of the weeks? How much is it?  And are there several weeks that have a shortfall?

Once you have this information, you’ll know exactly how much money you need to cover the Christmas break. 

Knowing all this in advance will mean a few things.  

Firstly, you can arrange to put aside money in the next few weeks to cover the shutdown period.  Ideally, this is something you need to do over a greater period of time but it’s never too late to plan ahead.

Secondly, knowing that you have enough money to cover your expenses over any period of closure means that you don’t need to ruin your holiday by stressing over money or checking the bank balance on a daily basis.

Once your cash flow is planned for the holidays you’ll be able to go into the Christmas holiday period without the stress of the Christmas cash flow crisis.