While the Christmas/New Year period is traditionally a slow time of year for business, you still need to meet your expenses. Ensure your bases are covered before you clock off for the year.
1. Plan ahead
Do a budget to figure out how much you are going to need to cover your overheads. This is especially important if it’s going to be several weeks before you start earning a crust again.
A cashflow forecast will help you identify any issues before they become problems.
2. Get your cashflow in order
You can achieve this by:
- Prioritising jobs you can complete quickly so you can invoice clients straightaway.
- Incentivising early payment for completed work by offering a discount.
- Chasing outstanding invoices.
- Seeing if you can re-negotiate payment terms with suppliers.
- Reducing unnecessary spending.
3. Don’t forget taxes
IRD expects GST and provisional tax payments to be made on January 15. Interest of 8.22% and late payment penalties apply if you don’t.
Here’s a tip: If paying both is going to hurt the bank account, prioritise paying the GST. You can utilise the services of an IRD-approved tax pooling provider such as Tax Traders to pay the provisional tax later. They reduce IRD interest by up to 30% and eliminate late payment penalties.
As always, we’re happy to work with you so you have nothing to worry about while you enjoy your summer break, get in touch with us today.