A busy December can still leave your business short of money in January. You may buy materials before customers pay, close for a few days while bills continue, or return to work before the first payment arrives.

Your December cash flow plan should answer one practical question: will there be enough money available on the dates you need to pay?

You can start with a notebook, your phone or a basic spreadsheet. Use actual records where you have them, and clearly mark estimates.

The short answer

List the cash available now. Add the payments you reasonably expect to receive each week. Subtract the money that must leave that week. Carry the remaining balance into the following week.

Continue through the end of January. Then test what happens if an important customer pays late.

1. Start with the money you actually have

Choose a starting date and write down the business cash available then. Include usable bank balances and business cash on hand. Check pending transactions before treating the whole balance as available.

Keep unpaid invoices separate. They belong in the weeks when customers are expected to pay, not in your opening balance.

For example, if you have R8,000 available and a customer owes you R12,000, your starting cash is R8,000. The R12,000 is a future receipt until it arrives.

Also list money already committed to upcoming bills. A healthy-looking balance can be misleading if most of it is needed for wages, stock or rent.

Cash movement and profit are different measures. Your forecast needs the dates money enters and leaves the business, including relevant financing payments, rather than only an estimate of profit. Business Queensland explains the distinction between financial statements.

2. Put customer payments in the right week

For each expected payment, record the customer or source, the amount, the expected receipt date, what supports that date and anything that could delay it.

Check whether an invoice needs a purchase-order number, delivery confirmation or approval before payment. Ask customers about their December payment runs and the final date for submitting documents. These are questions to check, not assumptions that every business closes for the same period.

Separate confirmed work from hoped-for sales. You might label entries “invoice issued”, “order confirmed” and “estimate”. This makes it easier to see where the plan depends on uncertain income.

If you sell daily, use your own recent trading records to estimate receipts. Adjust for your planned opening days and any evidence of seasonal demand. Do not copy another business’s December expectations into your forecast.

3. List payments by their actual due dates

Work through your bank statements, supplier invoices and existing commitments. Include payments that are easy to overlook:

  • Rent, utilities, data and software.
  • Wages and other agreed staff payments.
  • Materials, stock and delivery costs.
  • Loan instalments and bank charges.
  • Applicable tax payments.
  • Planned payments to yourself.
  • Costs of closing and restarting operations.

For taxes and employment payments, use the obligations and dates that apply to your business. Confirm uncertainties with SARS, your payroll provider or an appropriately qualified adviser. This guide does not calculate tax or holiday-pay entitlements.

Record payments once. If a supplier invoice is already included in your stock-payment line, do not add it again under other bills.

Regular records, planned payment dates and comparisons between forecast and actual cash help keep a forecast useful. The Australian Government’s cash-flow guide covers these basic management practices.

4. Calculate each week’s closing balance

Opening cash + cash received − cash paid = closing cash.

The closing cash becomes the next week’s opening cash.

Here is a fictional teaching example, not a real business or a suggested budget. The business begins with R18,000:

  • Week 1: R18,000 + R12,000 received − R20,000 paid = R10,000 remaining.
  • Week 2: R10,000 + R8,000 − R15,000 = R3,000 remaining.
  • Week 3: R3,000 + R25,000 − R18,000 = R10,000 remaining.
  • Week 4: R10,000 + R10,000 − R12,000 = R8,000 remaining.

Across the four weeks, receipts total R55,000 and payments total R65,000. The business uses R10,000 of its opening cash and ends with R8,000.

The tightest week is week 2, when only R3,000 remains. That is useful to know before approving another purchase.

5. Test one late payment

Now change just one assumption. Suppose the R25,000 expected in week 3 arrives in week 5 instead. Keep all other figures unchanged.

Week 3 becomes R3,000 + R0 − R18,000 = a R15,000 shortfall.

Week 4 becomes −R15,000 + R10,000 − R12,000 = a R17,000 shortfall.

The negative numbers show unmet funding needs. They do not mean the bank will allow the account to go below zero. The owner needs to act before week 3. Waiting for the eventual payment does not cover bills falling due beforehand.

A month-end total is not enough. Check the order of payments within tight weeks: a receipt on Friday cannot fund a bill due on Monday unless other cash is available. Business Queensland highlights receipt and payment timing.

6. Choose actions that address the gap

Write a specific response beside each shortfall. Possibilities include invoicing completed work promptly, resolving missing documents, following up overdue amounts, or agreeing deposits and staged payments for suitable new work.

Check stock before ordering more. A supplier discount is not automatically helpful if paying early leaves you unable to meet another commitment.

If you need different supplier terms, ask before the due date and record the agreement. Do not simply move a payment in your forecast as though permission has been given.

Review optional purchases separately from essential commitments. Avoid promising extra owner withdrawals because December receipts look strong before you have checked January.

Business Victoria’s guidance recommends regular forecasting, payment follow-ups, sensible stock management and testing alternative scenarios.

7. Give January its own check

Carry the plan through your first normal payment cycle after reopening. If that extends beyond January, extend the forecast too.

Write down your reopening date, the first expected customer receipt and the bills due before then. Ask whether your business needs stock, transport or materials before it can earn again.

For each uncertain figure, add a next action. “Ask customer about payment date on Thursday” is more useful than leaving “R20,000 expected” unexplained.

If your prices do not cover the work, forecasting alone will not solve the problem. Read Digitise SA’s pricing guide alongside your cash plan.

Your first 20-minute check

You do not have to finish every detail today.

  • Five minutes: confirm your opening cash.
  • Five minutes: list the next four weeks’ essential payments.
  • Five minutes: add expected receipts and mark uncertain dates.
  • Five minutes: identify the lowest balance and choose one action.

Then extend the plan through January and update it each week with actual receipts and payments.

Before you finish, check that you have included yourself, avoided counting invoices twice, tested a late payment and written down what you will do if the balance falls short.

If you are still preparing to open, start with Digitise SA’s startup-budget guide. If a funding gap remains, the business-funding guide explains options to investigate.

The aim is a plan you can use to make the next decision with better information.

This article provides general business education, not personalised financial, tax or legal advice.

This article is general information, checked against the official sources shown on the date given. It is not legal, tax or financial advice. Rules change, so confirm with the official source or a qualified adviser before you act.