The Cashflow Storm: Why Small Businesses Struggle Every Year.
Just like everyone in Queensland knows December marks the start of storm season, we also know it marks the start of a cashflow storm. Yet every year, business owners act surprised when the clouds roll in. The Christmas crunch hits hard on your bottom line and if you’re not ready, your cashflow could take a direct hit that is really hard to recover from in the new year.
With only eight weeks until December (we know, what the heck?!), now is the time to prepare. Because once the storm arrives, it’s too late to scramble for cover. You need to start cashflow planning NOW.
Why Small Businesses Struggle with Cashflow at Christmas
December brings two things: unpredictable weather, and predictable financial pressure. Well three – if you count involuntary family gatherings.
But let’s focus on business and the financial pressure is twofold during this time of year:
- Increased expenses – client gifts, holiday pay, staff Christmas parties, and social celebrations.
- Decreased income – work shuts down, customers tighten their belts, and January can be one of the quietest months of the year.
When the gap widens between money in and money out, many businesses default to using credit cards and short-term loans. The problem? Those cashflow quick fixes follow you into the new year, and if you’re not careful, you’ll still be paying for Christmas in 2026 (with special thanks to interest rates of 15+%).
The Real Cost of Ignoring the Cashflow Storm
It’s human nature. We don’t usually change until the pain gets bad enough. That’s why more than 90% of businesses we see struggle with cashflow. That’s a serious statistic. Most small businesses rely on band aid measures like loans instead of building a sustainable cashflow plan that will not only see them survive the financial holiday storm but also grow a successful business.
The warning signs are easy to ignore:
- Shuffling money around to cover wages and other expenses
- Not paying yourself a wage for the interim
- Sleepless nights wondering how you’ll cover wages
- Using debt as a safety net to cover supplier invoices
But ignoring the storm doesn’t make it go away, it only makes the damage worse.
Cashflow Management Tips for the Christmas Storm Season
The good news is you don’t have to get caught in the downpour. If you start planning your cashflow now, there’s still time to build financial protection:
Build a Cash Reserve for December and January
Aim for three months’ worth of reserves to carry you through the December-to-January squeeze. Even a small buffer gives you options. Start putting every cent of profit into a separate bank account so you have money to draw on for expenses in December. If you don’t know exact profit figures then put away 10-15% of every client invoice.
Use Time to Spread Out Costs
The benefit of planning ahead is time. With eight weeks before Christmas, you can spread costs, reduce reliance on debt, and smooth out your cashflow.
Track Cash Inflows and Outflows
You can’t manage what you don’t measure. Ask yourself:
- How much money is coming in this month?
- How much is going out this month?
- Do you know the difference?
- Where can you tighten in October and November to ensure you have enough cash to fund December and January?
If you don’t have a simple, easy-to-follow cashflow plan, you’re operating blind.
Understand the True Cost of Poor Cashflow
What is it costing you to not know your numbers? Stress, sleepless nights, and interest repayments stack up quickly. Investing in proper cashflow management almost always costs less than the alternative.
Why Financial Education Helps Small Business Owners
One of the biggest challenges for business owners is that financial literacy isn’t taught well. Too many people start on the back foot, relying on accountants to “fix” things after the fact. But real power comes from understanding your numbers now and using them to plan ahead.
Don’t Let The Christmas Cashflow Storm Send You Into Debt
Christmas doesn’t have to be a financial storm you dread. With the right planning, you can start January calm, prepared, and ahead, not starting on the back foot before the new year even kicks off.
At Proactive Accounting, we help businesses build practical cashflow strategies that protect against the Christmas crunch and beyond. If you need Cashflow Clarity in your business consider our Cashflow Health Check.
Our Cashflow Health Check is designed to help you get a clear picture of your cashflow, understand what’s really going on behind your P&L, and give you actionable insights to improve and grow your business.
What’s Included:
- An initial discovery call to understand your business, your challenges, and your goals
- An analysis of your cashflow using your accounting software (Xero, MYOB, QuickBooks etc.)
- Analysis of your income vs expenses and where things might be leaking
- Insights based on your business stage
- Guidance on budgeting, forecasting and understanding the story your numbers are telling you
- A 1:1 review meeting with our Principal or Senior Accountant to discuss your results and recommended best next steps
- A printed copy of your Cashflow and P&L report with key notes and recommendations.
📞 Ready to start Cashflow Planning with a Cashflow Health Check?
Contact us today to book your Cashflow Health Check — and start building the business (and life) you actually want.
Want to learn more? Check out Cashflow Planning, to read how we can help.
