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‘Tis the season to get ready

Kriya Team
August 15, 2019
min read
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Business who aren't prepared for seasonal demand feel the pressure on cash flow. The solution? A little forward thinking and lot of great financial advice.

It might not be time to deck the halls with boughs of holly quite yet, but it’s the best time to start preparing for the festive season. Why? Because more than a quarter of the revenue earned by the UK’s SMEs is driven by seasonal demand. So, chances are, this is a critical time for many of the 5.7 million small and medium-sized businesses around the country.

While the rest of us might only have to worry about making sure the cards beat the last post and getting the presents under the tree, SMEs have a different set of concerns. According to our latest Kriya Business Insights research, these are the biggest pressures faced by business owners during peak times:

  1. Having staff to fulfil orders
  2. Paying their suppliers
  3. Ensuring timely delivery of goods/services
  4. Waiting for payments

It makes sense, then, that businesses typically start getting ready for the festive rush 3 months in advance. If they prepare for the anticipated increase in business activity at all. But many don’t. This failure to prepare affects them primarily with cash flow constraints.


Our research indicates that almost 3 out of 4 SMEs are selling their goods and services to large corporates and blue-chip companies. While this may appear to be a solid and stable customer-base, the flip side is that payment terms can extend to 180 days. This lengthy wait for payment can often tips the scales for smaller businesses.

December, January and February are months when businesses are also likely to need additional financial support – further evidence that the festive season throws a bit of tinsel in the works.

The good news is that these types of peaks and troughs in cash flow can be smoothed out with a little forward planning. By understanding when seasonal peaks are likely to occur and seeking out the right financial advice ahead of those times, businesses can proactively take control of their cash flow.


Our Seasonal Peaks report found that 30% of business owners rely on their accountant to monitor cash flow. And yet, interestingly, two-thirds of business owners aren’t actually seeking any advice when it comes to managing seasonal demand. Accountants play a central role for many SMEs and more businesses should be turning to these trusted advisers for practical advice on how to manage cash flow during their busiest times.

Of the businesses we surveyed, 48% increase their overdraft facilities to tackle cash flow constraints, compared to 16% who use invoice finance. But while every business has a bank account and more than likely knows what an overdraft is, not every SME is clued up about the other financial tools available to them.

The fixed terms and costs of an overdraft might not offer the best solution for every business compared to the flexibility and simplicity of invoice finance, for example. This is why good advice from a cash flow savvy accountant can be crucial – especially for younger businesses who don’t have a dedicated inhouse finance function just yet.


The jolly old man in the red suit isn’t the only one to benefit from good old-fashioned planning with his trusty list. Alleviating financial pressures at peak times really does come down to preparation.

The first step is to choose the right kind of finance. So, when making this choice, what do you need to tick off your list? Here are six key factors to consider about any solution:

  1. How quickly will you get a decision?
  2. Is it easy to set up and use?
  3. Does it offer a choice between ongoing or occasional funding?
  4. Is it on a contract or pay-as-you-go basis?
  5. Are the costs straightforward?
  6. Can you get personal support when you need it?

While seasonal demand can be hard to manage, getting your turkeys in a row early on will certainly soften the blow.

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