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TAANZ - Travel Agents Association New Zealand link to website

T. 09 524 6178      F. 09 524 6179     E. contactus@taaccounting.co.nz

Is your cash flow causing you concern?    DECEMBER 2015

Cash Flow is critical to business survival.

HOW TO MAXIMISE YOUR CASH FLOW NOW!!!

Manage the financial resources of your business:

  • Ask for a larger deposit on all bookings.
  • Retain funds as long as you can before paying suppliers.
  • Get your customers on Credit Card or Full Payment upon booking.
  • Pay your monthly creditors later than usual.
  • Use your company credit card to extend your time to pay suppliers.
  • Ask your suppliers for extended credit terms – payment over 3 months or longer.
  • Change your GST to payments basis and 6 months if possible.
  • Put aside 20% - 30% of your receipts to pay GST and Tax.
  • Check your tax calculations and put off payment until you have funds or pay your tax with your GST.
  • Fund your tax through your accountant.
  • Put surplus funds in a high interest account or on deposit.
  • Ask staff to work extra unpaid now and take time off later.

WHEN BUSINESS IS QUIET MINIMISE YOUR EXPENSES!!!

Manage your business expenses better over the low season:

  • Decide who can afford to take unpaid leave.
  • Reduce the number of paid days per week.
  • Pay your telephone bill on a Credit Card.
  • Reduce your expenses both business and personal to the minimum.
  • When business is quiet get staff to take their holidays – this maximizes productivity when they return.
  • Get any projects completed over this time when staff is not so busy.

GET FUNDING IN PLACE EARLY FOR THE LOW SEASON

Manage your funding:

  • Request a temporary overdraft well before you need it.
  • Obtain a loan using the equity in your property.
  • Obtain a loan using the equity in your Insurance policy.
  • Obtain a line of credit for emergencies well before your may require the funds.
  • Flexirent any Computer purchases.
  • Extend the credit limit on your Credit Cards.

WHAT LONGER TERM STRUCTURAL CHANGES CAN YOU MAKE TO IMPROVE CASH FLOW?

Long term solutions

  • Match your long term assets with long term debt so you have the cash to pay your bills.
  • Ensure that you have good systems in place to capture and bill every booking.
  • Bill your service as soon as it is delivered.
  • Develop your web presence to get customers direct and improve your margins.
  • Prepare accounting reports monthly to keep a close check on your business.
  • Prepare a Budget / Cash Flow so you know how much to put aside for the low season.
  • If you are a tour operator – open a Trust / Travel Bank account – to enable better management of funds. Only take out what is yours.