How to survive the Christmas cashflow crunch

While retailers race through their busiest time of year, not every business benefits from the Christmas rush. Many service-based, wholesale, and manufacturing businesses face the opposite problem: sales slow down just as costs peak. Holiday pay, bonuses, shutdown periods, and reduced customer activity can quickly tighten cash flow. The key is preparing early, staying visible, and keeping a clear view of your financial position through the summer months.

Here are four practical ways to stay ahead:

1. Forecast to February: Projecting your income and expenses well into the new year helps you spot potential shortfalls and take action before they become problems.

2. Invoice early, follow up now: Send invoices before your shutdown period and chase outstanding debts while clients are still around. If you don't already, start the habit of billing as soon as a job is completed. But I can't because my supplier hasn't billed me! If this is what is holding you back, ask them to send you a price list so you can add disbursements (plus markup) as they are recorded by the team, or ask your supplier to bill you weekly during the busy period.

3. Prioritise essential spending: Identify what expenses are necessary and what can wait until revenue picks back up.

4. Prepare for January’s tax obligations: The 15 January due dates for PAYE, GST, and provisional tax can feel like a Grinchy surprise. Set aside funds now to avoid starting the new year under pressure.

   1. Not sure how to start that habit?

      1. Run your GST report after reconciling your bank dashboard (weekly is usually sufficient), and set aside funds based on that interim GST report into a separate GST or Tax Account.

      2. Calculate what the holiday pay you are likely to pay out over the Christmas shutdown, and set aside funds into a separate Holiday Pay Account.

      3. We've seen these two habits take away a lot of anxiety from business owners.

A summer slowdown doesn’t need to derail your plans. With the right forecasting, communication, and cash flow strategies, you can move through the holiday season with confidence.

If this season feels tight, get in touch. Business Studio Innovators can help you plan ahead, manage cash flow, and explore IRD instalment options to lighten the load.