Holiday Season Tips for Accountants to Stay Festive
The start of the holiday season brings with it plenty of festive cheer and excitement. However, all too often, it can also be a source of unimaginable stress because of all the planning to do and chores to run. For accountants, in particular, the holiday season can be an exhausting period to get through because it also signals the end of the year. If you have experienced the holiday rush first-hand before, here are our top tips to ensure that your accounting firm will be more jolly and less pressured this holiday season.
Consider deploying extra team members
During this period, there are fewer working days than other months. Many employees also choose to go on long leaves so they can spend more time with their family. Unfortunately, December is also when there is a lot of extra work that your accounting firm has to handle. To cope with this additional workload, it might be a good idea to consider employing extra contract workers or freelancers made easily available through the rise of the gig economy. Contrary to popular belief, it is fairly easy to find contract workers during the holiday season as this is the period when individuals want to have extra income to spend on their loved ones. You can also engage with a remote workforce through outsourcing your bookkeeping to ensure your accounting firm is operating at maximum efficiency no matter how much of an employee shortage there is.
Assess your accounts receivable
With the year coming to a close, it’s crucial that you manage your cash flow to ensure that there are no outstanding debts. This is critical as January and February are typically slow periods for accounting firms and you will need to have adequate financial resources to compensate. Draft and send out your invoices by at least December 10 to ensure that you will receive payments before the end of the year. You can also send out a note with the invoice explaining how critical it is that the invoices be paid before December 31. You will also need to make a list of all clients who have an outstanding debt so you can clear it. To encourage them to pay on time, you can offer a waiver of the credit card fee or a small discount from their existing debt.
Clear all accounts payable
In the same way that it is crucial for you to receive all payments before December 31, it is just as important for your external vendors that they do the same. Being punctual with your accounts payable is also important to create goodwill with your vendors as it can benefit your firm in the long run. If you have received invoices from them, send out a reminder to send you bills before December 10. If you get them any later than that, you might not be able to clear and pay them in time. On the other hand, if you want to avoid payments in December to increase your cash reserve for the new year, you can try working out a plan that is agreeable to both parties.
Ensure accurate and timely payroll payments
During the festive season, payroll functions often don’t function smoothly for a variety of reasons. In some firms, the shortage of employees leads to delayed payments as bookkeepers might be on leave. It isn’t uncommon for the firm owners themselves to have to process payments during this month. To ensure all your full-time, part-time and contract employees get paid on time, you need to plan well in advance. Ask your employees to apply for their holiday leave with at least a two-week notice so you can schedule your payroll payments plan accordingly. If the bookkeeper in charge of payroll processing is going on leave, ask them to create a plan for payments before they go. When this is done, you can disburse payments through your internet banking account at the click of a button without requiring any additional support. Payroll processing can also be outsourced to ensure there are no lags in payments. By taking these steps, you can ensure that your employees do not face any difficulties due to delayed payments during the holiday season.
Prepare for the post-holiday season slump
The holiday season is predictably a very busy time for accountants, but the months following it are far from. During January and February, new clients rarely come on board while work for most existing clients slows down. Because of this, maintaining a healthy cash reserve during these critical months remains a challenge for most accounting firms. To avoid overspending during January and February, it’s important that you plan well in advance. Set a budget for this period taking into account amount received from retainers, outstanding accounts receivables and overhead casts. Once this limit has been set, ensure you don’t cross it through unnecessary expenditures. The budget will also help you assess whether your current cash reserves are sufficient for the coming months. If you discover that it is falling short, you can take measures during December to save money by cancelling unnecessary subscriptions, bringing down overhead costs or any other step that is relevant to your firm.
Appreciate your clients!
Appreciating your clients at the end of the year helps nurture the relationship you share with them. It also helps you sustain your partnership going into the new year. When it comes to thanking your clients, the more personal it is, the better! Even a simple handwritten note can be more effective than just a store-bought Christmas card that has been signed by you. Make sure you write something personal about your relationship with them rather than a generic ‘seasons greetings’ message. This will show them that you truly value them instead of having just a professional equation with them. If you want to go the extra mile (and if your budget allows it) you can even throw a holiday party for all your clients to get to know them better in an informal setting.
With these tips, the twelve days to Christmas will be a more joyful time for everyone in your accounting firm! By taking proactive measures during this period, you will also be in a better position to start the new year on a strong note.