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With the 2019 festive season approaching, many small to medium sized enterprises (SMEs) are gearing up for their busiest business period. To make the most of the last quarter of the year, small business owners will need to plan ahead, to ensure that staff holidays, inventory levels and annual bonuses do not impact their opportunity for growth and revenue.

“Peak season can mean a boom in business for many companies, but it’s important to prepare for all production scenarios. Invoices and holiday wages still need to be paid, even if stock doesn’t move as quickly as expected,” says Daniel Goldberg, co-founder of Bridgement, a Fintech company offering revolving credit facilities and digital invoice financing to SMEs.

Goldberg offers some advice to SME owners to get the most out of the holiday period:

  1. Forecast – If you sell a manufactured product you must plan your inventory ahead of time. Look at previous sales seasons, current inventory and any scaling of business you might expect so that you can plan as accurately as possible.
  2. Take stock – business owners in need of extra stock should consider how they will pay for it and any additional costs that might crop up. Speak to your key suppliers about your needs for the peak season in advance.
  3. Encourage prompt payments – to maintain a strong cash position, remind your debtors about their payment terms and when their payments are due. Consider invoicing your clients early to ensure that you get paid on time. For bulk orders consider taking an upfront deposit. This means you don’t have to fund the production costs solely from your cash flow.
  4. Bridge gaps in cash flow – The sooner this is addressed, the more time you’ll have to speak with financers and reorganise if necessary. There are a number of solutions which may work to meet immediate working capital concerns such as invoice financing or short-term credit facilities.
  5. Extended payment terms – if you have a history of reliable payments with your suppliers, you can look into negotiating extended payment terms leading up to peak season. This will provide cash flow relief at a critical time for your business.

“The holiday season can bring a number of unexpected expenses and a general increase in spending to your business, which puts further strain on your balance sheet. Unlike bank loans, which can take weeks to process, invoice financing is a viable option to support your business during your busiest period,” says Goldberg.

Using machine learning for credit analysis and decisioning to speed up their application process, Bridgement offers SMEs instant advances on expected income. Accessing customer’s financial data directly from their accounting software or bank account, credit facilities from R10 000 to R5-million are available to registered companies who have been trading for longer than six months and have an annual turnover of more than R500 000. Interested businesses can apply in under two minutes on their website, www.bridgement.com.