Holiday Shutdown Checklist: Get Your Accounts in Order Before You Take a Break
Summer holidays are just around the corner, and while it’s the perfect time to switch off and recharge, there are some important financial housekeeping tasks to take care of first.
For any business planning a holiday shutdown, making sure your accounts are in order before you head off is key to avoiding financial headaches in January. With important IRD payments due on January 15th, let’s look at what needs to be sorted before you sign-off for a well-deserved break.
1. Make Sure Your Tax Payments Are Sorted
January 15th might feel like a long way off when you’re in holiday mode, but it’s one of the biggest tax deadlines of the year. Missing it can result in penalties no one wants to deal with at the start of the new year.
Review Your Tax Obligations: Double-check what payments are due on January 15th, including provisional tax, GST, and any other obligations. Make sure you’ve set aside enough to cover these amounts.
Schedule Payments: Set up your tax payments in advance to check that they’re made on time, even if you’re not in the office. Use your bank’s scheduling feature or Xero’s payment services to automate this process.
Cash Flow Check: Ensure you’ve got the cash flow to cover your tax payments without putting a strain on your finances when business resumes. If cash is tight, chat with us about your options.
2. Invoicing and Receivables – Don’t Let the Cash Dry Up
With a holiday shutdown, it’s easy for invoicing and receivables to take a back seat. But keeping cash flow healthy during this period is critical.
Send Out Invoices Before You Go: Make sure all work completed up until your shutdown is invoiced before you head off. The sooner you send them out, the sooner the payments roll in.
Follow Up on Outstanding Invoices: No one likes chasing money, but now’s the time to follow up on any overdue invoices. Send reminders before you leave and consider setting up automated reminders if you use software like Xero.
Plan for Payment Delays: Understand that payments may take longer during the holiday season, so plan your cash flow accordingly. Don’t expect all clients to pay on time, especially if they’re on holiday too.
3. Accounts Payable – Pay Now or Schedule for Later
Leaving bills unpaid over the holiday break can lead to unwanted surprises, like late fees and grumpy suppliers.
Review Outstanding Bills: Go through your accounts payable and make sure you’re up-to-date with payments to suppliers, contractors, and other creditors.
Schedule Payments: Use online banking to set up scheduled payments for any bills that are due during your holiday. This helps you avoid late fees and keeps your relationships with suppliers smooth.
Clear Any Debts: If you’ve got the cash, clear any debts that might hang over into the new year. A fresh start in 2025 without outstanding liabilities is always a good idea.
4. Review Your Financial Reports – Know Your Numbers
Before you switch off for the holidays, take a moment to review your financial reports. Understanding your current position will give you peace of mind while you’re away.
Profit and Loss Review: Check your P&L to ensure you’ve hit your targets for the year and identify any outstanding income or expenses.
Cash Flow Forecast: Update your cash flow forecast to see how your business will look financially over the shutdown period and into the new year. Make sure you’re not heading into 2025 with your bank balance in the red.
Balance Sheet Check: Ensure all your accounts are reconciled, and there are no unrecorded transactions that could affect your cash position.
5. Prepare for a Smooth Re-Start in the New Year
Coming back to a messy inbox and financial chaos is no way to start the year. A little prep now will save you hours of stress in January.
Set Up Automated Reminders: Ensure that reminders for any critical financial tasks are set up in your accounting software or through calendar alerts. This way, you won’t miss anything important while you’re unwinding.
Prepare for Payroll: If you have staff, make sure your payroll is sorted for any holiday pay or bonuses. Schedule these payments ahead of time to avoid issues.
Final Reconciliation: Do a final reconciliation of your bank accounts to ensure that everything is up to date and balanced before the break. It’s a lot easier to catch discrepancies now than deal with them after a few weeks off.
A Little Financial Planning Goes a Long Way
You deserve a stress-free break to relax and recharge. To make that happen, it’s crucial to get your financial ducks in a row before you head off. With a little prep now, you can skip the January scramble and start the new year on the right foot.
Happy holidays from all of us at The Accounts Department!