WHY FEBRUARY 2021 MAY BE A TOUGH MONTH FOR SMALL BUSINESS AND WHAT YOU CAN DO TO AVOID THIS
As we near the end of an incomparable year, many businesses are frantically working towards their much-deserved Christmas break. We urge you to take a moment to stop, breathe, and read this article carefully. Your future self will thank you.
Things may seem busy now up until Christmas, however we urge all small businesses to think beyond this point. The point we are referring to is February 2021.
February 2021 will be a particularly important month for small businesses in Australia. Why? February is traditionally the worst cashflow month for small business.
This is because:
Your customers have had holidays in January, so they have not worked as much to pay you;
Your small business may have had holidays in January too, so you may not have billed all your customers who would normally be due to pay by the start of February;
BAS is due in February and the 2021 BAS has a tax instalment added to it, so it is usually higher than normal;
And to add to it – some stimulus packages are ending in January so the effects will flow into February.
Do not ignore these facts and plan ahead now.
One simple way you can plan ahead is by putting funds aside now, while times are busy and cashflow is good. It will make it easier to get through February, a typically tight month for everyone.
If you require accounting support to help you plan ahead for 2021, please contact the Wrights team today.