By Clive Lewis, Head of Enterprise, ICAEW
It is not only employees that must write lists and make plans to prepare for their summer get-aways – the small and medium sized businesses (SMEs) they temporarily leave behind for the sun and sand must be equally prepared for the departure of staff to ensure the business does not suffer whilst employees enjoy their well-earned break.
At this time of year when employees will be taking their holiday it is essential that firms plan ahead to ensure business is not disrupted. With increased uncertainty across business, it is important to maintain cash flow.
Seven top tips for SMEs to manage while staff are on holiday:
- Plan ahead to avoid payment delays. During the summer you will have staff away – but so will your customers. So getting cash into your business is critical.
- Make sure that staff complete a proper handover and in enough time. Staff involved in raising sales invoices and chasing customers for payment must properly brief the staff standing in for them; especially on commitments made by customers regarding payment. They must also be aware of how to follow up customer queries regarding sales invoices so that disputes are resolved quickly.
- Make sure invoices are still paid on time, otherwise you could damage your credit rating and limit your access to supplies on credit.
- If the person authorising payment is away make sure that someone else can authorise it in their absence. The same applies with cheque signatories.
- Make sure that suppliers or customers are aware of any alternatives to their regular contacts to ensure a smooth handover, ensuring that stand-in staff can access a list of contact details for suppliers and customers.
- Systems for recording and forecasting cash flow need to be maintained in the finance director’s absence.
- Debrief people when they get back – this will enable them to get back “up to speed” after their holiday.
Cash is king and businesses must ensure that cash continues to come in during the summer. Firms must examine their debt collection and bill paying procedures, as well as making sure proper safeguards are in place while staff are away, so that they’re not caught short.