As the Christmas season gets well underway, a number of different businesses, regardless of their size, will end up spending copious amounts of money on items and events. Whether it’s been planned or not, these expenses can quickly add up and before you know it, you could end up significantly out of pocket come January.
Prevent this by taking the necessary steps required to spend within your means. This is especially important for small businesses and also for those who are new to owning their own company. So what can you do to prevent overspending this Christmas and what can RLTP Accountants do to help?
Put a Christmas budget in place
Although this might seem like somewhat of a mundane task, it will help to prevent you from overspending during this festive period. According to the Wandsworth Times, the British public are predicted to spend around £84 billion this Christmas in a bid to make up for last year.
With restrictions in place during the Christmas of 2020, we weren’t allowed to meet up with family and friends and workplaces had to refrain from holding festive parties. Now that those restrictions no longer apply, it’s no wonder that people are looking to spend more this Christmas in order to make up for the lack of celebrations the previous year.
The Wandsworth Times recently reported that people living in London could end up spending as much as £1,745 each in the last few weeks leading up to Christmas, but other parts of the country are set to spend less:
- East of England – £1,341.45 per head
- North West – £1,153.19 per head
- West Midlands – £1,134.05 per head
- East Midlands – £1,103.82 per head
- Yorkshire and Humberside – £1,045.25 per head
- North East – £993.94 per head
Seeing as we’re all set to spend more this holiday season, it’s never been more important for your business to draw up a strict spending budget to prevent you from forking out too much money for the sake of extravagant celebrations. But how can you do that, exactly?
How to draw up a Christmas budget for your small business
It’s relatively easy for you to draw up a simple budgeting plan for your small business and you can do this by:
- Writing down how much money your business brings in each month
- Writing down your expenses and outgoings, such as employee wages, rent and energy bills
- Predicting how much money you’ll need to spend next year – RLTP Accountants offer first-class financial forecasting services that you’ll be able to benefit from
- Deducting your expenses from your monthly income and take a sum of the remaining money for use at Christmas
As a business owner, you’re likely to be extremely busy, so in order to relieve you of some pressure and to ensure that your budget is accurate and robust, you should look to a professional to do it for you. RLTP Accountants are proud to provide customers throughout Derby, Leicester, Nottingham and the surrounding areas with excellent budgeting services that can be expertly tailored to your specific needs and requirements. We specialise in helping small businesses and start up businesses alike, so you’ll have absolute peace of mind that you’ll be in safe hands with the professionals here at RLTP Accountants.
Be in control of your spending
There are plenty of ways to be in control of your spending this Christmas, including using prepaid cards where specific limits can be set or simply analysing and updating your pre-planned budget regularly and, of course, sticking to it as much as possible. These methods are essential for maintaining control over your cash flow just when you need it most. But how else can you keep track of your spending?
How to keep track of business spending this Christmas
- Set your monthly budget
- Stick to a daily spending limit
- Keep tabs on seasonal expenses
- Time your spending in order to coincide with cash injections, for example
- Force yourself and your employees to stay within budget
Refrain from using credit cards
Credit cards offer great consumer protection, but should only be used if you can afford to pay them off straight away. Other than that, you should steer well clear of spending on credit cards. It can be extremely easy to amass an eye watering amount of debt over the Christmas period, simply because the interest rates in the UK are becoming extraordinarily high. Something that you paid £15 for could end up costing far more further down the line when the credit card has to be paid off.
File away & keep track of receipts
It’s important for any business of any size to keep all receipts and invoices, whether they be physical copies or digital alternatives and the same goes for Christmas, too. Keep track of everything that’s been bought throughout the festive season and keep the associated receipts. Capture them digitally or laminate them in order to preserve them for as long as possible and then file them safely away.
This will help you to locate receipts as soon as possible, should you need them, and it will also help you to add up everything that was spent over the holiday period so you’ll be able to better manage your books. RLTP Accountants have bookkeeping services available in order to ensure your books are balanced and on track.
Make yourself & your employees aware of financial fraud risks
Christmas brings with it increased cases of financial fraud and it’s important that every business owner does everything they can to mitigate this. Make sure that all of your staff, contractors and suppliers are aware of the risks, signs and penalties of fraud and scams in a bid to protect your accounts.
It would also be beneficial for the business owner to educate themselves further about the same topic so that they can be prepared and put preventative measures in place. The police’s Action Fraud website is a useful resource for those looking to stay safe financially over Christmas.
RLTP Accountants are highly-experienced and fully-qualified professionals with a wealth of industry knowledge and expertise. With a specialist team at the helm of our operations, you’ll always be able to rely on us to provide you with effective accountancy services that’ll help to take the stress and pressure away from busy business owners, ensuring you can focus more on what you do best. For more information about how we can assist your small business or start up business today, get in touch with a member of our friendly, dedicated team today – we’re always happy to hear from you.