Handy Hints for the End of the Year

Five Things All Employers Should Consider In Early December

As the holiday season approaches, take some time to think about how you want to structure the operation of your business. A bit of planning will ensure you avoid paperwork mishaps and breaches of the Holidays Act 2003.

Taking time out over the summer? You can have an “annual closedown” for your whole business or part of it but give employees at least 14 days’ notice in writing. You can ask staff to take their existing annual leave. If they don’t have leave left, they can take leave without pay or you can both agree to them taking annual leave in advance.

Need employees to work the public holidays? The only way you can make employees work on a public holiday is if it falls on a day they normally work, and the requirement to work on the public holiday must be included in their employment agreement.

Know how much you need to pay them? If the public holiday falls on the day they would normally work, you pay them time and a half and give them a paid day off. If the holiday doesn’t fall on a day they normally work, you pay them time and a half.

Employees asking to cash up? Staff can cash up up to one week of their minimum four weeks’ annual holidays in any entitlement year if you’re okay with it. If not, you must decline in writing (but you don’t have to give a reason).

Need to modify an employment agreement? There are rules to follow, so give us a call for guidance on the best places to go to get this done.

Have you got a strategy for a financially stress-free holiday period?

Christmas holiday breaks are a chance to recharge for the year ahead especially after the year we have had. We look forward to warmer weather and finally setting up an out-of-office email for the break. However, for business owners, this time can be stressful without careful cash-flow planning.

Even if you do continue to operate through the holiday shutdown season, your customers’ financial behaviour may not remain the same.

The strategies and tips shared below are generalised, however, we are here if you need to budget and prepare a cash-flow forecast. We can also help if you need assistance in applying for short term finance to get you through the break.

Why is cash-flow planning particularly important at this time of year?

Staff leave needs to be covered in addition to your normal fixed overheads like rent, creditors and tax compliance. The budget and forecasting process ensures you know your numbers and are prepared. If you are shutting down, you won’t be driving revenue during this period and sales may take time to get started again in the new year.

Here are some simple strategies that can help

  • Decide your Christmas and holiday break dates – confirm these with staff, customers and suppliers.
  • Budget and plan for annual leave – remember the pay rates may be higher than standard hourly rates, also factor in statutory public holidays.
  • Decide – if you are going to pay out leave in full at the beginning of the Christmas break or continue to pay as usual throughout the break.
  • Review your work in progress (WIP) – plan to complete jobs or services that can be invoiced and paid before Christmas (remember if you don’t invoice and get paid before Christmas, you may not see the money until mid to late January).
  • Capacity planning – There is often a rush to get everything done before Christmas, whether it’s the kitchen benchtop installed or the beauty treatment before the break, so make sure you have the capacity to maximise on this.
  • Stock-take – Do you need to order in goods now to be able to complete work in progress? Check that there is stock on hand available.
  • Making an arrangement with Inland Revenue – if you find you can not make payments, it is possible to apply for an instalment arrangement. There are costs associated with this, however it may provide a solution that gets you through the holiday period. Talk to us, we can help.

Need financial support?

If you can’t make ends meet, now is the time to organise short term financial relief. Please let us know if you need any help with cash-flow forecasting, budgeting or finance applications.

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