The so-called silly season is upon us once again. What should be a time to kick-back and relax, is in reality often one filled with financial and consequently emotional stressors, especially when you’re running a trades business.
If the thought of putting your feet up over the holiday period has you feeling on edge, then keep reading.
For me, having a break (and I mean a real break, where I’m relaxed and present in the moment) is dependent on me knowing that I have enough money to pay my staff and my bills. If I know I’ve got that cash on hand, then I can actually switch off, slow down, relax and enjoy the holidays.
So what can you do in the weeks leading up to Christmas to make that happen? Here’s a breakdown of what I recommend tradies get done by the time they shut down for the break.
1. Make sure you can cover staff wages over the holiday period
If you have a few staff, it’s amazing how much the holidays can cost you over December and January. The best thing to do is contact your accountant or payroll person and ask them to work it out. You just have to know what you need, so you don’t get caught short.
2. Meet your GST, ACC and any other tax payments
While you’re sorting out your wage obligations, you also want to work out what you need to fork out for all your tax bills and then make the voluntary payments. There’s nothing worse than getting those big bills in February and not having the cash to pay them.
3. Get your invoicing out now
Once you know the cost of points one and two above, you can then work out if you have enough cash in bank, in progress and then you’ll know what’s outstanding. It’s crucial you get your invoicing out as early as you can. In the first week of December, you should take two days off and just crank out your invoicing. Invoice everything you can.
4. Call for payment
So your invoices are out the door, which is great, but you need to know if and when you’ll get paid. If you don’t have the time to call customers who owe you money, rope in a family member, friend or contractor to make the calls for you. You won’t be the only one feeling the pinch of the festive season, so you need to ask when you can budget on receiving their payment. You need to do this at the start of December so you can fix any problems pronto and get the cash.
5. Confirm and communicate your shut down plan
If you are planning to shut down over Christmas and the New Year, you’ll want to keep your staff and customers in the loop. Let them know when you are going to be on holiday, when you’ll be back and whether you or one of your team will be available for emergency call-outs (and how best to get in touch). It can be as simple as changing your voicemail recording on your phone and setting up your out-of-office or vacation reminders on your email account.
So don’t leave your finances (or your Christmas cheer) to chance! Make that call to your accountant now. Find out what your obligations are and make a plan from there. Trust me when I say you’ll be glad you did.
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