insolvency

Death by Christmas

It is often said in Australia that people start to wind down to Christmas on the first Tuesday of November….Melbourne Cup Day.

Whether there’s any truth to this or not, the fact is that many industries use the approaching Christmas period as an excuse to hold over buying decisions until the following calendar year. Lots of people take annual kamagra 100 leave around mid-December and lots don’t get back to work until late January. 

For business owners, this can mean a frustrating period of time where few decisions get made, people are tough to get hold of, projects stall and cashflow dries up.

For businesses with solid fundamentals, this doesn’t matter. It is factored into their annual fluctuations, they have the cashflow to manage it, and it’s a good time to reduce their annual leave liability.

But for businesses who are on the edge and have limited cash, things can go from bad to worse over the 8 or so weeks that Christmas goes on. 

It is interesting to note that figures for personal and SME insolvencies and bankruptcies usually lag behind the corporate insolvencies index by about six to nine months. Given that there was a steadily rising NSW trend of corporate insolvencies between March and June in 2015, we can expect that the following SME and personal insolvencies will hit between December 2015 and March 2016. Right around Christmas.

So if you are a business with cashflow challenges, the time to be planning for Christmas is definitely not after the event. Many businesses will find out the hard way this year, that January 2016 is too late for them.

A robust cashflow projection is the only way to get a clear picture of funding requirements, and then an early discussion with the bank about funding options is essential.

We work with businesses every day on cashflow management and capital raising. We even sit down with their bank and help them present the figures. We find that the bank prefers having a third party involved, and our clients appreciate the support and the assistance in understanding their options.

If you are worried cashflow over the Christmas period, you probably need help now….not in January.

Call us and we’ll talk you through your options. www.gallowaypartners.com.au