With just a few short weeks until Christmas, you might be looking forward to downing tools for the break. But before you start eyeing the Netflix Christmas films, there are a few things you need to do to wrap up your working year! Read on to discover our list of essential financial tasks for tradespeople!
Essential Financial Tasks for Tradespeople – How to Wrap Up Your Year!
Invoicing:
At this time of year, it pays to raise your invoices quickly. With so much to think about over the holidays, it’s easy for processes to slip, so either raise invoices immediately or create a reminder immediately.
If you don’t have payment terms on your invoice, add them now! That way, there’s no excuse for late payment. Using Xero (our favourite accounting software program), you can add payment terms to your quote and invoice templates.
It’s useful to have a payment collection process like GoCardless (which you can also integrate with Xero), but at the very least, make sure your bank details are on your invoices.
Cash Flow Management:
Of course, Cash Flow Management isn’t just for Christmas; having a forecast is useful all year round.
However, it can be particularly helpful at this time of year. If you’re working with homeowners, most won’t want you working in their houses over the holidays. Similarly, commercial or business customers might have shut up shop for the festivities, so income for these months might be leaner.
But with a forecast, you can determine what payments you expect to receive in December and January and what expenses you’ll need to pay. Some forward thinking and planning make leaner months far less stressful.
Xero is brilliant for tracking outstanding payments or expenses. Your sales invoices and purchase invoices have due dates. You can easily view a list of what’s due and outstanding from your customers and suppliers.
Extend your financial planning into the New Year using cash flow forecasting to reach your financial and business goals in the year ahead.
Start with actuals – the actual cash in and out over 2024 and the actual P&L reporting for 2024 and use that information to create your first draft. Then, think about what you’re expecting from the next year. For example, are you investing in marketing to increase your sales? Is there new or replacement equipment to purchase? Add these changes to your cash flow forecast and budget, and think about where you’re looking to end 2025. If it’s not where you’d like it to be, now is the time to start thinking about what changes you need to make.
Top Tips & Tasks:
1: Forget the advent calendar; dig out a diary instead:
It helps to note important dates. Talk to customers about their plans to know when to contact them. Similarly, note when your suppliers shut up shop and reopen! Order materials a little earlier to ensure your jobs aren’t delayed when you’re back on deck.
2: Prepare your paperwork before you get caught up in wrapping paper:
Check you’ve added all your purchase invoices and receipts to Xero/Hubdoc/Dext to ensure nothing gets lost over the festive period.
3: Send out your invoices quicker than Santa delivers presents:
Ensure you raise and send all your invoices before the festive hustle takes over. This will help manage cash flow during the break and ensure you’re ready to roll into the New Year without a financial hiccup!
4: Who needs fireworks to start the new year with a bang?
Get a head start on 2025 by your January workload now. Send out quotes, follow up with clients, and lock in start dates for upcoming jobs. With everything tied up neatly, you’ll be ready to hit the ground running when the holiday dust settles!
Above all, make sure you celebrate the wins for the year. Look at what went well and how you can repeat that through 2025. Also, consider what didn’t go well and what changes you could make to ensure you can improve in these areas. If you’ve spent too much time keeping your books up to date when you could be doing the work you do best, it’s time to talk to us!
We review your accounts weekly to ensure they are accurate, up-to-date, and easy to access. In addition to managing your VAT returns and handling CIS, we provide monthly reports to all our clients, with the bare minimum being a Profit and Loss report. This is because we believe you can only make informed decisions for your business if you understand its numbers.