5 important cash flow lessons from your favourite Christmas movies

06/12/2018

With Christmas quickly approaching many of us will be firing up some of our favourite festive flicks to get us into the holiday spirit.

But did you know that hidden in these festive films are also plenty of business lessons?

Take a look at these five important cash flow lessons you can learn from your favourite Christmas movies.

Home Alone – Protect your cash flow

When eight-year-old troublemaker Kevin McCallister is accidentally left home alone by his family during Christmas vacation he has to quickly learn how to take of care of himself.

And, at the end of the film when burglars try to break into his house, instead of running away scared he stands his ground and protects his home: “This is my house and I have to defend it.” 

Likewise, you need to do all you can to protect your business and its cash flow. It’s no good relying on anyone else because the power is in your hands.

Especially in today’s turbulent economy with late payment and insolvencies a common occurrence, protecting your cash flow is more important than ever.

You can achieve this by improving your credit management process and utilising credit insurance.

Discover more ways you can protect your cash flow from bad debt here.

Elf – Don’t judge people by the way they look

When Buddy the elf arrives in New York people are very quick to judge him based on his hat, tights and endless stream of happiness. But once they get to know him they soon realise he’s just like the rest of us.

Similarly, in business it can be tempting to use a snap judgement to decide whether or not someone is worthy of being extended credit. But this can lead to you offering credit to those who can’t or won’t pay.

So, don’t be a cotton-headed ninny muggins and get to know your customers before deciding whether or not you offer them credit.

You can do this by using credit reports, account opening forms and online searches such as payment reports.

Discover how to get to know your customers better.

And, don’t forget that people can change. Just remember Buddy’s dad Walter was on Santa’s naughty list at the beginning but by the end of the film he had changed.

Likewise, just because your customers have been prompt payers in the past doesn’t mean they always will be. Even the most financially aware businesses can find themselves in cash flow difficulty.

So, be sure to stay up to date with your customers and their behaviours so you can spot any changes.

Here are some signs to look out for.

Jingle All The Way – Don’t procrastinate

In this festive favourite Arnold Schwarzenegger vows to get his son a Turbo Man action figure for Christmas. But, when he leaves his Christmas shopping until the very last minute, every store is sold out and he has to compete with everybody else in order to get one in time for Christmas.

Likewise, when it comes to your cash flow the longer you leave it to take action the worse the problem will get.

So, whether you need to source additional funding to keep your cash flowing or chase a late payment, don’t delay.

The sooner you tackle the problem the more likely you are to have a positive resolution.

This is particularly true when it comes to chasing overdue invoices as statistically the longer the invoice goes unpaid the less likely you are to collect payment.

If your procrastination stems from not having the time or resources to dedicate to the task you could benefit from outsourcing the task to the experts.

Here are some examples of when you might consider bringing in external help.

Love Actually – Don’t be afraid to stand up to bullies

Everyone was pleased when Prime Minister David (Hugh Grant) stood up to the US President (Billy Bob Thornton) with an epic speech challenging his political ally.

It couldn’t have been an easy thing to do but it probably wouldn’t have been as happy an ending if he didn’t.

Likewise, in business it can be daunting to stand up to another business – particularly when that business is larger than yours.

But, supply chain bullying should not be tolerated.

Whether it’s a business inflicting their own terms or paying late, don’t be afraid to challenge them.

Failure to do so could put your cash flow at risk.

Here are three quick tips to reduce the impact of poor payment practices

A Christmas Carol – Learn from your mistakes

On Christmas Eve, stingy businessman Ebenezer Scrooge is visited by three ghosts and is given one last chance to change his ways and learn from his mistakes.

As he eventually learns, the past is in the past.

And, if the meanest miser in Victorian London can learn from his mistakes, you can too.

Making mistakes is human – we all make them. It’s how we deal with those mistakes that determine our future.

So, don’t say “bah humbug” and simply give up.

Instead, reflect on your actions and consider ways you can improve so that you don’t continue to make the same mistakes.

Here are 23 credit control mistakes that are killing your cash flow. Are you making any?

What’s your favourite Christmas movie? Does it have a hidden cash flow lesson?