Christmas and end of year cash flow: the calendar that catches owners out

If you ask retailers what they dread about summer, few say Christmas Day. They say late January. The tills were busy, the stock was sold, the team worked hard, and then the bank balance sits lower than it did in October because everything arrived before the money did.

Christmas planning is mainly a calendar exercise. Cash leaves your account on fixed dates, and it comes in on dates that move around the holidays. This guide lays out those dates for 2026 into early 2027, how to find your lowest point, and what to do about it while you still have time.

Why does cash get tight around Christmas?

Four forces push the same way at once.

1. You spend before you earn. Stock for the peak is bought in September to November. Casual staff are rostered and trained. Marketing goes out.
2. Wages jump. Extra hours, public holiday rates and end-of-year bonuses or leave payouts land in December.
3. Customers slow down. Your own business customers close for a week or two. An invoice issued on 15 December often gets paid late January.
4. Demand falls after the peak. For hospitality, retail and trades, January can be quiet while rent, loan repayments and tax continue.

None of that means the business is unhealthy. It means a profitable year can still contain a thin quarter.

What dates do I need on the calendar?

Write these down now and add your own.

Date	What happens
Late October to November	Stock orders and deposits for the peak; casual hiring
21 December 2026	Monthly BAS for November due for monthly lodgers
Each pay run	Wages, plus super within seven business days under Payday Super
24 December to 2 January	Public holidays; banks and many businesses slow or close
Mid to late January	Customer payments resume; some suppliers restart invoicing
28 February 2027	Statutory due date for the October to December quarter BAS; it falls on a Sunday, so the effective date is Monday 1 March
Ongoing	Loan repayments, rent, insurance instalments, PAYG instalments

Check your own lodgement frequency with your accountant or the ATO, because agent lodgement concessions can shift some dates. Our guide to GST cash flow explains how GST collected in a busy December becomes a bill you owe, not cash you own.

Remember that GST and PAYG withheld in a strong sales month aren’t profit. A big December can produce a big BAS, so put that amount aside as you go, perhaps into a separate account. See how to set up a cash buffer.

How do I find my real low point?

Build a simple week-by-week forecast from the start of November to the end of March. Our 13-week cash flow guide shows the method; here is the short version.

1. Start with your actual bank balance today.
2. Add expected receipts by the week you really expect them, not the invoice due date. Move anything due between 22 December and 10 January out by at least two weeks.
3. Subtract fixed costs: wages, super, rent, repayments, insurance.
4. Subtract variable costs: stock, freight, casual labour, card fees.
5. Subtract tax: BAS, PAYG instalments, payroll tax where it applies.
6. Look for the lowest closing balance, and the week it happens.

If the lowest point is negative, that’s your funding need. If it’s positive but thin, a small buffer for surprises is wise. Most owners find the pinch lands between mid-January and the end of February, when BAS comes due and trade hasn’t yet recovered.

Worried your low point is going to be negative? Tell us where it lands and we can tell you what might fit.

How can I improve the picture before December?

Work on timing first, since it costs little.

• Invoice earlier. Send December invoices in the first week, not the last. Where terms are 14 days, you stand a chance of being paid before the break.
• Call your slow payers in November. Ask which date their final payment run will happen, and aim to be in it.
• Ask suppliers for dated terms. A “pay 31 January” arrangement on peak stock can turn a December bill into a February one. Our guide to negotiating supplier terms shows how.
• Order to sell, not to feel safe. Over-stocking for a peak that disappoints leaves you paying for stock in January. See inventory and cash flow.
• Roster against forecast sales. Public holiday hours can cost much more than ordinary ones under many awards, so check the relevant award before rostering.
• Pre-sell. Gift cards, deposits and pre-orders bring cash forward, but treat the cash as owed service until delivered.

When does finance make sense?

If timing changes don’t close the gap, funding that matches the season is the next step. The rule is simple: borrow for the length of the dip, and arrange it while your numbers still look good.

Option	Good for	Watch for
Overdraft or line of credit	Flexible cover across the whole summer	Set up before you need it; limits can be reviewed
Short-term loan	Stock build or a dated gap, repaid in the new year	Repayments starting in December when cash is lowest
Invoice finance	Trade customers who pay slowly over the break	Fees on every invoice you finance
Property-secured funding	Larger seasonal needs where you hold equity	Slower; consider the risks of using property as security

Banks are often the first place to ask, and for businesses that fit their criteria they’re frequently the cheapest. Speak to yours in October. If the answer is no or the limit is too low, other lenders consider seasonal businesses differently, which is covered in our page on seasonal businesses.

Timing matters. Lenders and accountants take leave in late December, valuations and documents slow down, and a request on 20 December is a risky bet. Apply by mid-November if you can.

A worked example: a garden centre in regional Victoria

This is an invented example. A garden centre turns over about $2.1m a year, with around 30 per cent of sales in November and December. The owner orders $85,000 of Christmas stock and trees in September and October, on 30-day terms.

The forecast shows these key points: stock invoices are paid in late October and November; wages rise by $9,000 a fortnight through December; monthly BAS is due on 21 December, with about $14,000 owing; and January sales drop to a third of December’s. The balance bottoms out in the third week of January at about $31,000 short.

The owner approaches the bank in October for a $40,000 seasonal increase to the overdraft, supported by last year’s December and January statements. Approved for three months, it’s drawn only in January and cleared by mid-March. Had it been left until January, the owner would have been asking while overdrawn, and likely paying more.

Mistakes to avoid at year end

• Planning to December but not to February.
• Treating GST and PAYG collected in a busy month as profit.
• Counting on invoices being paid on due dates that fall in the holiday period.
• Waiting until the account is stretched before talking to the bank.
• Ordering extra stock to hit a supplier discount, then paying it off from a quiet January.
• Skipping a buffer because the year was good.

Heading into summer and worried about cash: what now?

The best Christmas cash flow plans are dull. Dates are listed, the low point is known, and a facility is arranged before it’s urgent. If your forecast shows a shortfall, or you’d simply like a safety net, we can look at which kinds of funding suit a business with your seasonal pattern.

Our enquiry form takes about a minute, and it leaves your credit file as it is. We don’t pass your details around a panel of lenders; a real person reads your situation and phones you. Be as accurate as you can about your peak, your low point and the amount you think you’d need, and the first option raised should fit.

Plan your summer funding →