Credit Matters Blog

A Good Christmas Starts Now!

Kim Radok 22 September 2014


If you want a really good business example of preparing for Christmas, you only have to look at retailers. Nearly every shop has already started to prepare for their Christmas. You may even see Christmas decorations for sale and plenty of other signs that Christmas is just around the corner.

Like the retailers, people in business have to start concentrating on their unpaid invoices now, not later. Retailers don't wait until the bank is nearly empty and start madly preparing for Christmas in December, and neither should you.

Furthermore, once we get closer to Christmas, every business person's mind is focused on maximising sales. Unfortunately, as a result, almost every other aspect of doing business is neglected. It is not unusual for example to see the focus on following up unpaid invoices to be dropped, business disciplines go by the board as customers are allowed to buy over their credit limits, etc.

Consequently as you approach the Christmas and New Year break in early December, you suddenly realise the bank balance is looking pretty ordinary, invoices haven't been paid and your anticipated holiday away from the business is looking bleak. The cause; there is little or no cash in the bank to enjoy your holiday break.

Unfortunately if you wait until the last two or three weeks before Christmas before you start making telephone calls and sending emails - YOU ARE TOO LATE. Let me repeat that, YOU ARE TOO LATE.  Furthermore, history shows any efforts you do make in this period, will be largely wasted or counter-productive in maintaining good business relations with your customers.

THEREFORE THE TIME TO START IS NOW - SEPTEMBER/OCTOBER, especially if you have been distracted by other business activities to date. If you want the best possible cashflow result by Christmas, now is the time to start. I cannot emphasise this timing factor enough.

Briefly, here are 10 reasons for starting to focus on your outstanding invoices now.

1  The customer is unlikely to pay if you don't ask.

2 If the customer does not have a copy of your invoice, they cannot pay it.

3 If you have not answered the customers enquiries on the invoices already raised and sent, they are not going to pay them.

4 If you find the customer does not want to pay you, you can initiate actions which may result in you being paid before Christmas.

5 If your customer only makes one or two cheque or payment runs each month, and there are any issues, it may take four to six weeks before the invoice is paid.

6 If your customer only completes cheque or payment runs at the end of the month, waiting to early December to make the first contact, means at best you do not get paid until January the following year.

7 You will not be your customer's only supplier demanding money before Christmas. What makes you think you have any payment priority over any other supplier demanding money?

8 Your customer may fob you off with a reply, we will pay you before Christmas, and they do that with a cheque posted on the 24th of December.

9  It is not unusual for your customer to be conserving their money so they can enjoy their own Christmas and New Year break.

10 Historically, if a business which has problems is going to close down, they often do so in the Christmas and New Year period. In the meantime, they may pay their employers in an effort to give them one last Christmas and mitigate the negativity of the future loss of their jobs. Suppliers will always be a last consideration for any payments under such circumstances.

If you want to maximise your cash for Christmas and New Year, and you have not been focused on the unpaid invoices, now is the time to start making contact. Furthermore, as you approach your peak selling period, now is not the time to stop contacting customers for your unpaid invoices. If anything, you should be quietly stepping up your efforts to ensure each payment is received as promised.

May you be paid today rather than tomorrow or in this case, may you be paid before Christmas 2014 rather than next year or not at all!

Kim Radok