Cashflow is the heartbeat of any small business.

Profit means little if you can’t pay the bills. For many New Zealand SME’s, especially those with seasonal swings or tight margins, managing cashflow is the difference between thriving and merely surviving.

Here’s how to keep more money in your bank account (not just on your profit and loss report).

1. Get Paid Faster

Speed up receivables:

• Invoice immediately – Don’t wait until “the end of the month”. Automate invoicing in Xero right after the job is done.
• Tighten payment terms – Consider 7 or 14 day terms instead of the standard 20th of the following month.
• Follow up consistently – Use invoice reminders or assign someone to follow up weekly.

Tip: Use Stripe to let customers pay directly from the invoice — no excuses.

2. Slow Down Payments (without Burning Bridges)

Ease pressure on cashflow by managing supplier payments:

• Negotiate supplier terms – If you’re on 7 day terms, ask for 20 or 30. Reliable customers often get flexibility.
• Use your credit card wisely – Pay now using your card, then take advantage of up to 55 interest-free days.
• Stagger payments – Prioritise by due date, relationship importance and what’s due vs available cash.

3. Forecast Like a Pro

A 13-week rolling cashflow forecast is one of the most powerful tools in any SME owner’s kit.

• Early predictions – know when cash is tight before it happens.
• Plan for GST and Provisional Tax – these bills are regular and predictable - build them in.
• Model 'what-if' scenarios – What happens if sales dip or you hire someone new?

Tip: A simple spreadsheet can do the trick or there is forecasting software available.

4. Boost Margins, Not Just Cut Costs

Improving cashflow isn't always about trimming expenses — it’s also about improving what is earned per sale.

• Review your pricing – Are you charging enough to sustain your business?
• Drop low-margin jobs – Focus your energy where the money is.
• Consider package deals – Offer higher-value options, add-ons, or recurring options.

5. Finance Intelligently

External funding isn’t evil if it helps to smooth gaps or unlock growth.

• Tax pooling – use services like Tax Traders or TMNZ to ease the burden of provisional tax. Your accountant can set this up.
• Invoice finance – Get paid 80–90% of the invoice upfront to free up cash.
• Short-term loans – Useful for bridging seasonal gaps but ALWAYS check the interest and terms.

6. Avoid the Common Cashflow Killers

• Overstocking – Inventory is just cash sitting around.
• Drawing too much – Don’t empty your shareholder current account too fast. Keep aside at least 25% for tax and 15% for GST.
• Late GST or PAYE – The penalties hurt. If you’re stuck, talk to IRD early about instalment plans.
• Buying vehicles and other assets which are more expensive than what is necessary or can be afforded. The funds to buy the assets ultimately come from profits and reduce the amount you can draw from your business.

Final Thought

Cashflow is about good habits and clear visibility.

Businesses that stay on top of their cashflow gain control, resilience, and room to grow.

In today’s economic climate, that is your competitive edge.

If you would like help with building a simple cashflow forecast or reviewing your payment terms, let’s talk.

At David Hooper Chartered Accountants, we specialise in helping small businesses optimise their finances and improve cashflow. Get in touch today at [email protected] or call 09 421 1635.