For businesses, the holiday period can prove to be both busy and expensive. With extra staff costs, promotional activity, the general increase in demand, and not to mention the rise of inflation and cost of living, it’s easy for cashflow to become a problem.

In this article, we’ll look at some ways to avoid the Christmas cashflow crunch and keep your business in good financial health over the festive season.


bring in more cash

promote the use of gift cards

Gift cards are essentially pre-sales that should be a staple of your cashflow strategy. They can be for anything, not just retail items or services [like those offered at spas and salons]. A gift card is something that even a business service could provide.

provide pre-order discounts on goods or services

Think of ways to get people to buy, book, and pay in advance. Advertise early-season savings on prepaid services and goods. The reduced profit margins are offset by providing quicker access to funds.

accept credit card payments

Credit card payments allow more customers to pay you instantly. Even though there is a nominal fee associated with each sale, it is well worth it to avoid the hassle of having to track down late payers. A merchant account with a mobile reader like Square or online merchants such as Stripe or PayPal can be set up in minutes.

buy now and pay later

Buy now and pay later facilities have proven to have a significant boost to sales. As a result, almost all businesses now offer facilities such as Afterpay and Zip Pay.

Much like cashflow in your business, customers also need to worry about their personal cashflow. As such, these services are incredibly beneficial, allowing customers to purchase items now and pay for them later in interest-free instalments.

These services pay you in full on the customer’s behalf and take on the debt collection process themselves, giving both you and your customer the benefit of better cashflow!

stay on top of customer credit limits

In an effort to win over new customers, it can be tempting to offer them credit. However, this can be risky, especially for smaller businesses that might not have the cashflow or capital to withstand bad debts.

It’s crucial to monitor credit limits and payment terms leading up to the holidays and give each credit application serious thought accordingly. By doing so, you can avoid getting into financial trouble.

managing delinquent customers

It’s not a big surprise that people’s spending habits change significantly around the holidays, and it can make it even more difficult to deal with customers who fall behind on their payments.

As a business owner, you want to do everything you can to help them get back on track. But at the same time, you also need to protect your own interests and make sure you are getting paid for the work you’ve done.

The best way to deal with delinquent customers is to reach out to them as soon as possible.

Let them know that you are willing to work with them to make things right, but you also need to be paid for the goods or services you have sold. If they are unable to make a payment, you can offer a payment plan or negotiate another arrangement, but always ensure you are getting something in return for the work you have done.


Sales are a great way to drive more demand, and customers are especially on the lookout for deals at this time of year. But consider the effect pricing will actually have on your profits and cashflow.

If you’re having trouble with turnover for certain products, running a sale can help you get rid of stagnant stock and free up capital to be put to work elsewhere. However, lower prices mean a tighter profit margin and require greater turnover for the same profit.

For your stock that isn’t facing demand issues, you may want to avoid a sale. Pricing is the biggest cashflow lever available to your business, and you may want to consider increasing prices on some products [especially if your profit margin has reduced because of inflation]. Depending on your profit margin, a small increase in price can often outweigh the lost demand, significantly improving cashflow and profits for your business.


reduce money going out

purchase carefully

It’s important to make sure you’re prepared for the busy period.

You don’t want to miss profits by not having enough stock on hand to meet demand, but over-ordering can be just as bad. Tying your cash up in stock that doesn’t sell quickly will at best, slow down your turnover, and at worst, will have to be written off as a loss.

To avoid over-ordering and holding too much inventory, review your stock levels carefully and only order what you need and will sell.

It is also a good idea to review your supplier’s delivery schedules so you know when to expect your shipments. This way, you can plan accordingly and make sure you have enough stock on hand to handle the increased volume.

Finally, remember to communicate with your customers so they know what to expect in terms of delivery times. This will help reduce customer frustration.

negotiate payment terms

One way to ease the cashflow pressure is to negotiate better payment terms with your suppliers. This can be a tough conversation to have, but it’s worth it if it means keeping your business afloat during the holiday period.

  • Explain your situation clearly and be honest about your financial difficulties.
  • Be prepared to offer something in return for more favourable terms, such as a commitment to only buy from them.
  • Be willing to compromise. Remember that your supplier is also trying to run a business, so they may not be able to offer you everything you want.

pay by credit card

This automatically provides you with longer payment terms, keeping more money in your bank account during the holidays. If you’re deciding between vendors, look for ones that accept credit card payments, or ask if they’ll take a credit card without applying a surcharge.

hedge international funds

If you purchase products from overseas, you may want to consider hedging some international funds. This can save you money by reducing the impact of currency fluctuations. Always speak with your advisor first to make sure you are maximising your investment at the right time.

seek small business funding

There is a lot of pressure to make sales and bring in revenue during this already hectic time of year.

One way to do this is by seeking out small business funding. There are a number of options available, from a line of credit, to equipment loans, to trade finance loans.

By taking advantage of these opportunities, you can free up some much-needed cash flow to help you make it through the holiday season.

It could be the boost your business needs to make it through to the New Year.


we’re here to help!

Remember, a little bit of planning with your businessDEPOT team, you can take advantage of the holiday season with these cashflow strategies.

If you’d like help implementing these strategies just give us a buzz on 1300BDEPOT or reach out at