Holiday cashflow guide for small businesses

At FTA Accountants, we've helped hundreds of Queensland businesses navigate December and January without stress. Here's how to set up your cash flow now so you can actually take a break.

Why Christmas kills cash flow

You know the pattern. December brings staff bonuses, Christmas parties, and supplier invoices that all need to be paid. Then January rolls around, and the work dries up. Clients are still on holiday, invoices sit unpaid, and you're left watching your account balance drop.

It's not bad management. It's just how the calendar works. But you can plan for it.

1. Work out what's coming

Sit down with your numbers. Look at December and January together. What income do you expect? What bills are due? What seasonal costs pop up (bonuses, events, that extra casual staff)?
Once you can see the whole picture, you'll spot problems early. That gives you weeks to fix issues rather than days.
Don't kid yourself on the income side. Plan for less and be happily wrong rather than the other way around.

2. Fix shortfalls now

Does your forecast show a gap in January? Sort it out this week, not Christmas week.
Talk to your bank about a minor overdraft or short-term facility. They're much more helpful when you come to them early with precise numbers.
Look at your December spending. Can that new equipment wait until February? Does the office really need a full renovation right now?
Run a pre-Christmas promotion or offer a discount for clients who pay in advance. A bit of extra cash now makes a big difference in six weeks.

3. Get paid what you're owed

Money sitting in unpaid invoices doesn't help you. Before Christmas, make collecting outstanding debts your priority.
Call people. Seriously. A two-minute phone call beats ten reminder emails. Most clients just forgot or got busy.
Offer a small discount for immediate payment to ensure the cash comes in. Sometimes, 5% off today beats waiting 45 days and paying interest on an overdraft.
Tell clients exactly when you need payment before your break. "We close December 20, so please pay by December 18" is clear and reasonable.

4. Handle suppliers properly

Pay your critical suppliers before you shut down. The last thing you need in January is a frozen account or delayed delivery due to an overdue invoice.
Check what's due between Christmas and mid-January. Either pay it early or contact your supplier and confirm when they'll be paid. Most appreciate the heads-up.
If you're cash-strapped, talk to them now. Some suppliers will shift payment dates or split bills if you ask before it becomes an issue.

5. Get your staffing right

If January's quiet for your business, push staff to take their annual leave then. It manages your payroll when revenue's down, and everyone comes back fresh.
Retail businesses facing a busy December should lock in rosters now. Balance customer service against overtime costs before they blow out.
Whatever your situation, tell staff early what's happening with the break, who's working when, and the expectations.

Quick tips by industry

Retail: Don't tie up all your cash in Christmas stock. Negotiate longer payment terms with suppliers for December orders so you're not paying everything at once.

Construction and trades: Chase progress payments hard in early December. Don't leave site hoping the money turns up. And use the quiet period for equipment servicing or paperwork.

Professional services: Bill clients by mid-December at the latest. Consider asking regular clients to switch to monthly retainers to keep income steadier year-round.

Set up better systems

Update your cash flow forecast every week through December and January. It takes fifteen minutes and stops surprises.
When you have a profitable month, set aside some of the profits specifically for Christmas. A small buffer fund takes the stress out of next year.
Review your standard payment terms. Can you shorten them? Could you offer a discount for a seven-day payment?
Use accounting software that shows your cash flow in real time. Being able to check your position from your phone on Boxing Day gives you peace of mind.

Don't make these mistakes

Assuming December sales will be excellent when they're usually just okay.
Forgetting your BAS payment or other tax bills due in January.
Going overboard on Christmas parties and gifts when cash is already tight.
Draining your account completely so you have nothing to restart with in January.