Checklist: Can your business survive the holiday period?
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 Management NZ 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.