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With only days left until the start of December, the festivities have already begun! From switching on the village lights, to trees for sale at the local DIY store and frothy gingerbread-flavoured concoctions available at all good coffee shops, you probably already have 'Jingle Bells' ringing in your ears.

We'd all love this to be a fun and carefree festive season, however for business owners, December can bring many a headache and with it, cashflow difficulties. With a little planning, you as a business owner can make sure that mince pies and mulled wine – rather than your business finances – are at the forefront of your mind. Read our action plan and make this festive season one to remember, not dread.

The first step to managing potential cashflow problems that may arise is to understand the issues that commonly cause businesses to experience cashflow difficulties in the first place. From our experience, these are the four most common issues faced by British SMEs between the months of October and December:

1. Increase in late payments

Slow-paying clients who often pay beyond your payment terms can have a significant impact on your cashflow. If you are a B2B business, it’s likely that come the festive season, many of your customers are also preparing themselves for the period, bolstering their cash reserves and possibly holding back on some payments to assist their efforts.

2. Raising finance becomes harder

Many traditional finance providers reduce their lending levels in the build up to Christmas. This makes raising finance quickly harder than at other periods throughout the year.

3. Too much stock on the books

Businesses often overestimate the amount of inventory levels needed, locking up much-needed cash in stock that they are unable to sell quickly.

4. Overtrading

At times, some businesses may encounter a high number of unexpected orders or new contracts. Whilst this can bring new opportunities, it can often also mean that the business might be at risk of overtrading; not being able to meet the needs of the contract with their current cash supply.

If you identify with any of the above common small business problems, it’s best to start addressing these now. To help you along, here’s a list of ten action points:

1. Start invoicing early
2. Confront any late paying customers now
3. Invest time in preparing accurate sales forecasts
4. Prioritise new contracts and clients
5. Look into solutions for improving receivables management in the short term
6. Closely scrutinise outgoings and consider whether costs can be temporarily reduced
7. Invest in improving customer relationships
8. Produce realistic cashflow forecasts to help easily identify any gaps that need to be plugged and, if needed, raise the finance now
9. Re-examine your supplier contracts
10. Plan and know staff availability so as to avoid crucial business functions stalling

Next step?

rebuildingsociety.com, unlike some traditional financial institutions, does not slow down during the festive period; in fact it is often one of our busiest periods as we support businesses when they need us. You can raise a business loan of £25,000 upwards over a period of six months to five years, and could have the funds in your bank within 7-10 days depending on your loan requirement.

Our business loan application takes less than 10 minutes to complete. Once submitted, one of our team will be in touch to discuss your application.

Thinking two steps ahead

If you’re quite happy that you have your festive season cashflow in hand, why not think a step further to the new year, and to the end of the tax year in April.

As a business owner, chances are you often lend your own money to your business in the form of a director's loan, whether this is to to help your business through difficult times, or just to invest in that next stage of growth. Your business most likely doesn’t pay you interest on this loan. And up until recently it hasn't made sense to do so, as you’d have been charged tax on this interest.

Consider the Director's Loan Account ISA from rebuildingsociety.com. This ISA account allows you to lend to your own business while using your ISA allowance for tax-free interest payments.