If you work in retail, this is likely the time of year you get busier than any other time, but as a service business, you might find that things are starting to slow. No doubt you will also be preparing yourself for a quiet month in January.

Trouble is, it’s also around this time that spending and splurging is unavoidable with Christmas parties, client gifts and staff bonuses clearing out the coffers. How can you ensure your business has a very merry Christmas season, but still manages to avoid a nasty financial hangover?

Fortunately there are some simple things you can do to help see through the festive season and avoid the January blues.

#1 Manage your cashflow

So stating the obvious thing first here. We talk about cashflow a lot here at Robinson & Co but the simple truth is that you can’t plan anything if you don’t have an idea of what’s coming in and out. You need to be proactive in your planning. Cloud accounting software such as Xero gives you an instant snapshot of your incomings and outgoings. We help our clients understand how they are performing towards their targets and to make predictions about the future. Having one eye on the road ahead is the only real way to effectively manage your cashflow.

#2 Be proactive with your invoicing

Issue your invoices as soon as jobs are completed, rather than at the end of the month if that is how you usually manage your billing. This will help get the payment process underway sooner. Rather than running the risk of any invoices getting caught up in the Christmas post, email them. This way you can be certain that your client is going to receive it. With Xero, your client is sent a clickable link to their invoice; this allows you to see whether your invoice has been opened by the client or not so you can send them a reminder email if necessary. Consider moving your regular clients onto Direct Debit – something you can also do through Xero with 3rd party plugins like GoCardless.

#3 Chase late payments

Now is the time to give your debtors a cheery Christmas nudge. Consider making contact a few days before the due date to ensure that they have received your invoice and are ready to process the payment. If you find that you’re too busy getting projects wrapped up before the end of the year, consider outsourcing this job. If you have any significantly overdue invoices with clients you don’t wish to work with again, consider an invoice factoring service.

Encourage direct bank transfers to your bank account by including this information on your invoice. If possible, consider introducing a late payment penalty to encourage on-time payments.