Christmas might still be a few weeks away, but for many businesses, the festive slowdown starts well before 25 December.
Customers close for the holidays, accounts teams take annual leave, and final payment runs happen earlier than usual. That means work completed in November or December could remain unpaid until January, or even later. And while your customers might be winding down, your business expenses certainly aren’t!
A little preparation now can make a big difference to your cash flow over Christmas and into the new year.
Check Your Customers’ Christmas Payment Deadlines
Just because an invoice is due before Christmas doesn’t necessarily mean it will be paid before Christmas. Some businesses only process supplier payments on certain dates, while others require purchase orders or internal approval before releasing funds.
If you’re expecting a significant payment, don’t leave it to chance. Contact the customer and ask when their final payment run takes place and what they need from you to ensure your invoice is included. It’s much easier to resolve a missing purchase order or invoice query now than when the person responsible has finished for the holidays.
Don’t Delay Sending Your Invoices
It sounds obvious, but the sooner you invoice, the sooner you can get paid.
If you’ve completed the work and are entitled to invoice, send it promptly. Make sure it includes the correct payment details, purchase order references where required, and clear payment terms.
For larger or longer-term projects, it may also be worth considering deposits or staged payments for future work. Agreeing payments at key milestones can help reduce the amount of money your business has tied up before getting paid.
Chase Outstanding Invoices Before the Holidays
Now is a good time to review your aged debtors report and identify any invoices that are overdue or approaching their payment date. Don’t assume customers will automatically pay before closing for Christmas.
A friendly reminder can often be enough, particularly where an invoice has simply been overlooked. Include the invoice number, outstanding amount, and due date, and ask when payment can be expected. If there’s a query or dispute, try to resolve it promptly. Where only part of an invoice is disputed, you could also discuss payment of the undisputed balance.
Our tip? Set aside 15 minutes each week to review outstanding invoices rather than waiting until cash flow becomes a problem.
Plan for a Slower January
It’s not just December you need to think about. Even if your business is busy before Christmas, customers taking longer to pay can affect your cash flow well into January and February. Take a look at your expected income alongside upcoming expenses, including wages, suppliers, rent, loan repayments, and tax bills. Then ask yourself: what happens if one or two of your larger customers pay three or four weeks later than expected?
A simple cash flow forecast can help you identify potential shortfalls early and make plans before they become urgent.
Keep Credit Control Going Over Christmas
If your business remains open over the festive period, make sure someone is responsible for checking payments and responding to customer queries. Even a quick review of outstanding invoices can help prevent things from slipping through the cracks.
Ultimately, getting paid promptly isn’t just about chasing overdue invoices. It’s about having clear payment terms, accurate paperwork, and a consistent credit control process throughout the year. The better prepared you are now, the fewer cash flow surprises you’re likely to face in January.
At Greystone Advisory, we help businesses understand their cash flow and plan ahead, particularly when seasonal changes affect income and expenditure. If you’re concerned about cash flow over Christmas or into 2027, get in touch and let’s look at the numbers together.
