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Cashflow is the money moving through your business: what arrives in the bank, what must leave it, and when. Profit is important, but it doesn’t guarantee you can pay this week’s wages, rent, tax, suppliers or loan repayments. Seasonal cashflow management helps you plan for quiet months while trading is strong.
For many small businesses across Aotearoa New Zealand, the year includes both busy and quieter periods that change your cashflow. Your cashflow might be affected by weather, project cycles, harvests, visitor demand or clients’ payment habits.
Variation in cashflow doesn’t necessarily signal a problem. The opportunity is to understand your business’ pattern and plan around it with confidence.
Map your seasonal cashflow pattern
A cashflow forecast is a practical forward view of what you expect to receive and pay, and when. A spreadsheet or accounting package can work well.
Include your opening bank balance, expected customer payments, wages, rent, stock, tax, loan repayments and other regular costs. Then calculate what should remain at the end of each month or week.
Look back at prior years if you have them. Which months are consistently stronger or weaker? Which costs rise at particular times?
If you are a newer business, industry benchmarks, supplier discussions and advice from an accountant or Business Mentor can help you make sensible assumptions. Consider a realistic scenario alongside a more cautious one. The value lies in seeing potential pressure early, not in perfectly predicting the future.
To map expected income and costs, you can also use the free Business.govt.nz cashflow forecaster.
Use busy periods to build a cash buffer
Peak trading can give you an opportunity to prepare for quieter periods. Setting aside some of the cash received in a strong month in a separate, accessible business savings account can help cover known off-season commitments and unexpected costs.
A cash buffer can help you make more deliberate investment, marketing and growth choices when trading slows.
Stock deserves particular attention. Having enough to meet customer demand matters, but excess inventory can absorb cash that may be needed for wages, supplier payments or tax.
Review buying patterns and consider smaller or more frequent orders with suppliers where this suits your business.
Help customer payments arrive sooner
The timing of customer payments can make a big difference, particularly in quieter months. Clear payment terms, accurate invoices and invoicing as soon as work is completed all support a steadier cash position.
For longer projects, staged payments can better reflect the work and costs involved. This means you are not waiting until the end of a project to receive full payment.
A simple, consistent follow-up process also helps. Keep a record of outstanding invoices, send a polite reminder shortly after the due date, and follow up personally if needed.
The aim is to make payment easy and expectations clear. Understanding how key customers usually pay can also make your cashflow forecast more realistic.
Business.govt.nz offers practical advice on getting paid on time. The guidance includes clear invoices, prompt reminders and payment plans for longer projects.
Plan short-term funding before cashflow pressure builds
Sometimes a forecast will show a temporary gap despite good planning. A temporary cash low can be normal in a seasonal business.
An overdraft or other short-term facility may help bridge a known, short-lived cash gap. Longer-term finance may be more suitable for a significant asset purchase.
The important point is timing. Conversations with a bank or adviser are usually more constructive when they happen before cash is under pressure.
It is also worth separating a temporary seasonal dip from an ongoing cash shortfall. If your business is regularly unable to pay suppliers, tax obligations, wages or other employee costs on time, review your pricing, margins, spending, payment terms or overall business model with professional support.
Review your cashflow forecast regularly
Cashflow management works best as a regular business habit, rather than an annual exercise. A monthly review may suit many NZ small businesses, while a weekly check can provide greater clarity during a known quiet period or when cash is tight.
Compare your forecast with what actually happened. This helps you improve future decisions and build a clearer view of your business’ seasonal pattern.
Small, consistent actions can make a real difference:
- Forecast income and expenses regularly.
- Invoice customers promptly.
- Follow up overdue payments.
- Hold a cash buffer during stronger trading periods.
- Seek support early when pressure is building.
These actions can turn seasonal variation from a source of stress into a manageable part of running your business.
Test new opportunities before you commit fully
You don't need to make every growth decision at once. Where you can, test an idea before you make a big investment.
For example, if you want to offer a new service, ask existing customers whether they'd use it. If you need more support, trial a contractor before you create a permanent role.
And before you start your trial, decide how you'll measure success and when you’ll review the data so you can decide whether to continue, adjust or stop.
Get support with your cashflow planning
If you want support to review your cashflow forecast, pricing, cash-flow forecasts or plans for quieter months, register for a Business Mentor. A Business Mentor can help you step back from urgent issues and focus on practical next steps for your business.
FAQs
What is seasonal cashflow?
Seasonal cashflow is the pattern of money coming into and leaving your business at different times of the year. For example, a tourism business may receive most of its income during peak visitor months but still need to pay rent, wages, insurance and suppliers throughout the year.
Understanding this pattern helps you prepare for quieter periods before they arrive.
How do I calculate seasonal cashflow?
Start with your opening bank balance for the week or month. Add the customer payments and other income you expect to receive. Then subtract all expected payments, including wages, rent, stock, tax, loan repayments and supplier invoices.
Closing bank balance = Opening balance + Money in − Money out
Repeat this for each week or month ahead. This shows when your bank balance may fall and whether you need to reduce spending, follow up invoices or arrange funding.
How far ahead should I forecast cashflow?
A 12-month forecast is useful for seeing your full seasonal cycle. However, it can also help to maintain a more detailed rolling forecast for the next 8 to 13 weeks, particularly if customer payments, stock purchases or project work can change quickly.
Update the forecast whenever you learn something new, such as a delayed payment, a confirmed job or an unexpected cost.
What are the early warning signs of a cashflow problem?
Common warning signs include regularly paying suppliers late, relying on personal funds to cover business costs, missing tax due dates, using an overdraft without a clear repayment plan, or having a bank balance that is consistently lower than forecast.
These signs do not necessarily mean the business is unviable. They do mean it is worth reviewing the forecast and getting advice early.
How much cash should a seasonal business keep in reserve?
There is no single amount that suits every business. Start by working out the essential costs you must meet in your quietest period, such as wages, rent, tax, loan repayments and supplier payments.
Your reserve should be based on the length and depth of your quieter season, how predictable customer payments are, and whether you have access to short-term funding if needed.
What should I do if a customer pays late?
First, check that the invoice is accurate and that the customer received it. Send a polite reminder shortly after the due date, including the invoice number, amount due, payment date and payment options.
If payment is still outstanding, contact the customer directly and keep a record of all follow-ups. For future work, consider clearer payment terms, deposits, progress payments or shorter invoicing cycles.
When should I talk to my bank or adviser about cashflow?
Talk to your bank, accountant, adviser or Business Mentor as soon as your forecast shows a likely shortfall. Early conversations give you time to consider options; prepare the information a lender may need and make a decision before payments become urgent.
Bring a current cashflow forecast, details of expected income, major upcoming costs and any steps you have already taken to manage the gap.
Can a Business Mentor help with seasonal cashflow planning?
A Business Mentor can provide an independent perspective on your forecast and help you identify the decisions that may have the greatest effect on cashflow. This could include reviewing pricing, payment terms, stock purchases, costs, timing of investment or plans for the next busy season.
They can also help you turn a cashflow forecast into a practical action plan, with clear priorities for the weeks and months ahead.
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