The Gift Of Christmas Payment Plans

It’s that time of year again when we start to look forward to Christmas.

Many of us will get the well deserved break that we’ve all been craving.

It also tends to tip the scale on the amount of cash we see coming in – as a result of Christmas sales.

But then the drag of the first quarter of next year looms.

Particularly for those businesses that rely on the Christmas sales to give them a bit of a boost towards the new year.

Historically, if we ever ran into trouble, we would set up a payment plan.

Not only to nurture our cash flow patterns, but also so we could have a systemised target in place to plan what to do when things go wrong.

I have found that in most cases, if we work alongside our Customers in understanding their needs, we can find middle ground.

That way we’re able to appreciate the circumstances as they present themselves and put forward a creative payment plan so everyone can have a stress free Christmas.

Here’s a couple of examples:

Example 1

I had a client who specialised in the Gift Trade.

There was a company based in the Western Isles who relied heavily on trade shows, though he could only afford to attend a number of them throughout the year.

One of the trade shows he’d focused his efforts on was one of the largest Gift Shows that takes place – around early February.

But he was entering into a difficult period; all three of his invoices were overdue, and he had received several Late Payment Charges from us.

Due to difficulty paying his staff members, he was in a culpable position with regards to his suppliers.

We agree on a split payment plan (30%/30%/40%).

This meant there was a regular cashflow coming in to pay off his overdue invoices.

But more importantly, we satisfied both the supplier and the customer.

Example 2

My next example is a Pub.

The whole year through it’s fairly quiet, but trade is reliant on motoring events that take place twice a year, down in the West Sussex area.

Similarly to the Gift Trade company above, they’d built up some trade and loan arrears on their pub.

Rather than threatening legal action, we put in place a creative split payment plan.

The plan meant that initially he would make a Cash On Order payment for his weekly trade, something in the region of £100 per week, increasing to around the entire balance.

That way this would start chipping away at the deficit that had been left behind, and clear the full balance when the seasonal repertoire was met.

Leaving both creditor and debtor satisfied, without the need to take legal action, is a win win situation.

At least, that’s my opinion … but what do you think? A creative solution or a slippery slope?

Are you in a similar situation? If you need some help working out your festive cashflow troubles book a call to talk about your options.