12 Days of Bizmas: Have you prepared your business for the Christmas rush?

Keith Softly, head of asset and invoice finance product, global transaction banking at Lloyds Banking Group, looks at how businesses can get their books ready for the festive period.

For many, it’s the most wonderful time of the year, but for businesses, Christmas can put enormous pressures on a firm’s cash flow.

The surge in demand for products and services during the festive period can make it increasingly difficult for firms to fund the extra stock, raw materials and staff needed to get through the holiday season.

Meanwhile, with payments often even slower during the festive period, businesses can find their cash flow squeezed at both ends.

On top of this, Black Friday and Cyber Monday mean consumers are now planning their Christmas spending well ahead of December, meaning retailers have to get any inventory ready earlier and have longer cash cycles for a longer period of time.

This makes keeping on top of cash flow increasingly difficult, particularly when the festivities and New Year’s sales rush dies down.

For small to medium-sized enterprises, particularly those in the retail or hospitality sectors, it’s vital that they have the working capital – the amount of money needed to cover day-to-day costs – to make it through the prolonged run-up to Christmas.

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