5 Ways to Optimize Your Cash Flow for Chinese New Year
Chinese New Year is just around the corner. Is your business ready to celebrate the joys of the new year? With the Chinese New Year holiday closing in, the pressure of overflowing customers is evident. While you struggle not to be overwhelmed, there’s also a queue of suppliers, employees and other service providers who push you to settle their payments before the big day arrives.
On the other hand, the business itself has its extra cost during Chinese New Year celebrations:
- Extra promotional cost to bring in customers for the festive sales
- Pay the staffs overtime for longer hours
- Cover for the additional supplies you need during this time
So, it is obvious to assume that your business is spread thin on cash flow during this period. You need to prepare before the festival is upon you to enjoy its perks. Keep reading to know-how!
1. Forecast Your Cash Flow
Run a quick check on your cash flow ins and outs. See the trail of sales and expenses for Chinese New Year in the last few years to get an estimate of the cash outflow you will experience during the Chinese New Year this time.
2. Manage the High Volume of Customers
You are sure to get an overflow of customers during the Chinese New Year time. Appoint friendly staff to offer fast and efficient services to customers. Be cautious of the orders to avoid any mishaps or delays in services. More happy customers mean more cash inflow!
3. Take Precautions against Delayed Payments from Debtors
To overcome the extra cost of catering to Chinese New Year customers, you need money! So, if your debtors do not pay you on time, you may be dangerously low on cash. Hence, keep a record of the debtors’ due time for payment, which falls under the Chinese New Year season. Request them for payment before the Chinese New Year.
4. Invoice Financing
It is common for debtors to pay you later than usual during the Chinese New Year season. This leaves you with tight cash flow to fulfill your orders during this time. Invoice financing allows you to turn your receivables into quick cash giving you the cash resources to take additional orders. After you complete an order and invoice the client, you can use the invoice to get upfront cash as high as 80% under CapitalBay’s Invoice Financing program in exchange for the invoice. This will allow you to meet your spike in orders.
5. Monitor Inventories
During Chinese New Year, some items sell more than others. For example, if you own a bakery, your moon cakes may be selling more than your other assortments of pastries during this festive season. Hence, make sure you have enough supplies to cater to the increased demand. Keep regular counts of your inventory so that you don’t run out on your most saleable item. After all, more sale means more cash inflow!
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