The Christmas period can be unpredictable for many businesses. Teams take leave, suppliers shut down, clients pay later, and expenses often rise. With so many moving parts, even well-established businesses can feel the pressure. However, a little early planning can make the festive season far more manageable and help you move into the new year with confidence.
Plan for Slower Cashflow with Strong Business Cashflow Management
December and January often disrupt standard trading patterns. Invoices are paid later, and you may face higher outgoings with holiday pay and reduced operations. By working closely with your business accountant, you can strengthen your cash flow management through decisions based on accurate forecasting that are aligned with your wider financial plan to avoid unnecessary pressure during this period.
A few simple steps can make a big difference:
- Invoice earlier than usual so payments land before clients go on break.
- Send friendly reminders in mid-December. People appreciate the prompt before the rush.
- Map out upcoming expenses, including wages, super, tax and supplier payments.
- Scenario-plan January cash flow, especially if sales typically dip during this period.
For example, a trade business expecting several large December payments may bring forward invoicing to ensure it has enough cash to cover holiday payroll and January materials. With support from a trusted advisor or accountant, these decisions become part of a broader business cash flow management strategy.
Prepare Your Business for a Strong Start to the New Year
The quieter weeks around Christmas provide a valuable opportunity to tidy up financial processes and plan. This is an ideal time to review your business cash flow management approach, assess your financial reporting, and confirm that you have the systems in place for a smooth transition into 2026. Engaging your business advisor or accountant during this period can help ensure you interpret your numbers correctly and make decisions based on clear, accurate insights.
You may wish to:
- Review unnecessary subscriptions or overheads
- Revisit budgets and financial projections with support from your advisor
- Evaluate supplier capacity over the holiday period
- Schedule early strategy conversations to set the direction for the new year
Refreshing your forecasts and reconnecting with key clients in early January can also set the tone for a strong start to the year, particularly when guided by a team that understands your financial position and long-term goals.
Keep Tax and FBT Considerations in Mind
Christmas celebrations and gifts are a great way to thank your team, but some expenses may trigger fringe benefits tax. Speaking with your business accountant before finalising year-end spending can help you understand what is deductible, what may attract FBT, and how these decisions affect your overall business cashflow management.
- Christmas parties may be subject to FBT depending on location, cost, and who attends.
- Staff gifts, such as hampers or vouchers, may fall under the minor benefits exemption if they remain below the threshold.
- Client gifts, such as wine or hampers, are often deductible, while entertainment, such as lunches, is generally not.
If you are considering new equipment purchases in early 2026, reviewing the timing with your accountant in relation to instant asset write-off rules can also support more effective planning. These factors should be assessed as part of your broader business cashflow management approach to ensure your festive spending remains compliant and financially efficient.
Managing Business Cashflow with Matthews Steer
With thoughtful planning and the right guidance, the festive season can be both enjoyable and financially smooth for your business.
At Matthews Steer, our Business Advisory and Accounting Partners, Adrian Misiano, Damian James, Charith Mandadige, and Nidal Mazloum, lead a committed team of accountants and advisors who work together to support businesses through detailed cashflow management, strengthening their financial position, tax planning, and cementing their forward-looking strategy.
If you are ready to strengthen your business cashflow management and set your business up for a successful start to 2026, our Melbourne business advisors are here to help. Contact Matthews Steer on (03) 9325 6300 or get in touch online to make an appointment.