As the festivities approach, we’ve got the key to keeping your small business finances in check. Unlock a worry-free holiday season for your business with our expert tips on managing expenses.

Discover practical strategies to save money and elevate your business during this busy season. Transform your holiday preparations with focused attention on key aspects, such as budgeting hacks and smart spending tips, ensuring a smooth Christmas and work holidays ahead.

Read on to stay ahead of the game and ensure your business survives and thrives during the holiday season.

Elevate your small business finances this holiday season with practical small business money management tips. These strategies ensure a smooth year-end for small business owners, setting the stage for a positive start to the new year.

It is common for businesses to hold Christmas parties for their employees. Sending gifts to clients, employees, and suppliers is also customary during the holiday season but subject to the company's gift policy and guidelines.

These expenses can rank high on the budget for this season. But did you know these are also tax-deductible expenses?

Tax may be far from your head now as the festivities kick in. But do not let it spoil your fun by not keeping a record of the information needed for tax deductions.

To ensure tax deductibility, official receipts, sales invoices, and other documents must support corporate giveaways and Christmas party expenses.

Christmas party expenses can be tax-deductible in the Philippines. For your holiday celebration, meticulously document all party costs, including attendance details and venue information, to use these expenses as tax deductions.

Ensure you collect official receipts for services or sales invoices for goods received, itemizing each aspect of the party.

Record keeping also applies to gifts for employees, clients, and suppliers. Keep a tab of receipts for each present as evidence of legitimate company expenses.

Withhold tax on your business expenditures, especially for those businesses under the Taxpayer Account Management Program (TAMP). Any income payment must demonstrate payment of the required income tax withholding to the BIR to qualify for a tax deduction.to qualify for a tax deduction.

Taxpayers use Revenue Regulations No. 2-1998 as the basis to determine if the expense is subject to withholding tax. Taxes on expenditures not adequately paid will have penalties.

To avoid this headache, you may consult with tax experts to comply with the rules accurately.

Pay using a credit card or with credit terms extending beyond the year-end date. Doing so optimizes the cash that will appear on your balance sheet.

Extending payables beyond the year-end shows a robust cash balance for financial reporting. The collection of receivables can also be higher after the holiday break, covering the payables due in January.

Payment terms extension not only eases the burden on your accountants during bank reconciliation but also substantially benefits your business.

By managing payment terms strategically, you enhance cash flow and improve liquidity.

Furthermore, it allows for better financial planning and flexibility, empowering you to make more informed decisions.

It’s a win-win - it reduces stress on your accountants as they get a smoother reconciliation process. On the other hand, your business gains a financial edge for more successful business operations.

Banks are not open on Christmas and other holidays like Rizal Day on the 30th. Many of your employees will be on a break, too!

Schedule all your cash outflows - manual cheques and automated wire transfers. You must plan how to effectively and efficiently support operations for the remaining weeks until year-end and at the start of the following year.

Ensure that cash tracking is up-to-date. Consider seasonal cash flow patterns to ensure you have enough cash during the holiday season.

Put off expenses that can wait, such as delaying repairs or maintenance work until after the holiday, to avoid drastically affecting the cash flow.

In addition, postpone big purchases like new office furniture or equipment. Delay big-ticket items and other expenses after year-end if not critical to the business operations.

During the holiday season, there might be a spike in expenses that are too small in amounts to merit issuing a check. The petty cash can cover these expenses.

Allot some time to record all your expenses and submit the supporting documents to the petty cash custodian to recognize the costs and update the petty cash.

But don’t forget to put aside a contingency amount so your petty cash will be enough to cover any unexpected expenses for the remainder of the year.

In addition, petty cash expenses are sources of allowable business deductions to help you save on income tax before the tax deadline.

Watch this video to get insights on effective petty cash management:

In the hustle and bustle of the holiday season, small business owners can elevate their money management game with the power of negotiation.

Establish and cultivate strong relationships with suppliers. This can lead to easy negotiations and secure exclusive discounts quickly and efficiently.

Moreover, you may also get preferential rates. You can enjoy cost savings and a steady flow of quality goods and services at the best prices.

See how your skillful negotiations directly impact your company’s financial health - experience increased profitability and reallocate resources for growth.

Gearing up your small business for the holiday season is more crucial than you think. Proper budgeting for the holidays and efficiently managing business expenses can make a difference in the financial state of your business.

The practical tips on money management are about more than just surviving Christmas chaos. They are about ending your year on a high note and kickstarting the new one right.

Take charge of your small business’s financial journey with OneCFO, your partner in growth. Our top-notch and well-equipped team ensures your business stays afloat during the holidays and you are stress-free.

Visit us at onecfoph.co or contact us at [email protected] to learn how we can help you strategize and effectively manage your expenses this holiday season.


Editor’s Note: This post was originally published in December 2022 and has been updated for comprehensiveness and relevance.

---

Read our disclaimer here.