It may be October but for many SMEs that are thinking ahead, it's beginning to look a lot like Christmas. The end of year retail period is one that many businesses are factoring in when it comes to preparing their finances for the peak period.
According to Roy Morgan, Australian consumer confidence has reached its highest level since late 2013. As well as this, business confidence is steadily on the up, according to the NAB Business confidence index. With both consumer confidence and business confidence in Australia on the increase, the end of year retail period will bear plenty of fruit for SMEs in the retail sectors.
According to Roy Morgan, Australian consumer confidence has reached its highest level since late 2013.
While it's easy to point towards the positives and potential returns ahead, it's imperative to retain a sense of perspective as there are challenges facing businesses in this period.
Securing finances to avoid falling short
The most important thing to consider when planning ahead for the end of year period is accounting for the potential pitfalls that can mean a shortage of cash.
Despite the high level of consumer activity there is no guarantee that stock will move as anticipated. While this is standard practise for SMEs in the retail sector, there are incremental costs that come at this time of year.
The Christmas period brings with it financial challenges as well as potential ROI.Many, if not all, retailers take on casual staff and pay additional holiday wages so need to ensure they have the necessary cash flow to cover these extra costs. With higher stock intake comes a higher number of invoices. If the stock isn't moving to quite the level it was forecast to, the worry of unpaid invoices can be very real.
It's important, therefore, for SMEs to plan ahead and understand that there are opportunities available to ensure there is a sufficient cash flow to cover all eventualities.
Cover your cash flow gaps
Should the aforementioned shortcomings occur, it's imperative for business owners to be aware of the options available to help bridge the financial gaps that may arise.
While there are a number of options available to secure short term finance, the least stressful is invoice financing. It's the ideal solution for SMEs around the end of year period as it provides a fast, stress-free finance approval that can be settled within a minimum timeframe in an uncomplicated manner.
At Earlypay, we understand that every business operates in its own manner. With this in mind, we have designed our facilities to provide the best financial solution for any business situation.