Mortgagebroker : Australia's First Comprehensive Mortgage Broker Directory

Christmas is a great time of year full of parties and great cheer. But for many of your clients that might have small businesses it can be a nightmare.

I have just finished being interviewed by CBS Interactive for one of their podcasts on the issue of the proactive planning cash flow for the Xmas Season until the end of March, and I thought I would share my thoughts with you to at least help advise your clients with small businesses.

Historically over the past 6 years statistically there are more corporate failures in Australia in March every year than any other time of the year. This is because of the following key issues:

* December & January are both 2 week "sales months"
* Overheads still have to be met during this period
* From mid December to mid February - no-one pays anyone - so cash dries up in the whole economy
* Key decision makers are on leave slowing any decisions down


The key points to come out of the podcast (which is 13 mins long) are :

* Establish credit control procedures for the next 2-3 months - if your clients are selling on credit terms they should establish payment terms NOW
* If they have any OLD debts - they should get them in NOW - they may lose them in the new year if they don't
* the GFC means their customers are WEAKER than this time last year - so they should get their money in - even if it means offering a settlement discount
* IF they are looking at raising additional finance - do it NOW - the banks and other lenders get swamped with enquiries at end of the year.
* IF they need cash during the next 3-4 months approach they should approach their bankers NOW rather than in a panicked way in January/February - bankers will be more likely to say NO! if they are in panic mode.
* IF they need cash during the next 3-4 months consider funding that does not require real estate security - like factoring (invoice finance) and inventory finance.

Its worth listening to the podcast http://www.cashstream.com.au/podcast/podcasts-factoring-cashflow.htmlas there are some case studies in it - but whatever you do please please get your clients to PLAN their cashflow for the next 4 months....so they can proactive with their lenders/bankers. If they don't it could be a nasty 3-4 months.

Good luck to all.
Tim Lea
Cash Stream Financial