As the end of the year draws near, business owners often find themselves torn between two extremes. On one side, there is the excitement of the festive rush and the promise of a well-deserved break. On the other, there is the looming financial pressure known as the "holiday cash crunch."

For Australian businesses, December and January present a unique hurdle. It is a period where expenses historically spike just as revenue in many sectors begins to slow. To ensure you can enjoy your holiday without financial anxiety, it is vital to look ahead at the next six weeks. A clear plan implemented now can protect your cash position and ensure you hit the ground running in 2026.

The "Triple Threat" to Holiday Cash Flow

Your business is about to face several significant outgoings in a condensed timeframe. Rather than viewing these as standard monthly costs, view them as a compounded hit to your bank balance.

1. The Payroll Spike and Leave Loading December payroll is typically the heaviest of the financial year. Beyond standard wages, if your staff are taking annual leave, you may be liable for Leave Loading (typically 17.5%) on top of their base rate. Furthermore, if you pay staff in advance prior to a shutdown, you are effectively funding several weeks of payroll in a single transaction, requiring a significant cash reserve.

2. The "Shutdown" Supplier Run Just as you prepare to wind down, so do your suppliers. Many will request payment of outstanding invoices before closing their books for the year. Consequently, you may face pressure to settle accounts much earlier than your standard 30 or 60-day terms.

3. The January Compliance Hangover A common pitfall for businesses is surviving December only to run dry in January. You must reserve cash now for statutory obligations due in early 2026:

• Superannuation: Super guarantee contributions for the quarter (Oct–Dec 2025) must reach funds by 28 January 2026.

• BAS Lodgement: The December quarter Business Activity Statement (BAS) is also due early in the new year. A strong trading period in November and December means your GST and PAYG withholding liabilities will be higher than usual.

The Income Gap

While your expenses are climbing, your income likely faces a pause. For many industries—especially construction, professional services, and B2B consulting—trading essentially halts for two to three weeks. If you stop operations on December 20th, you may not see new cash flow until late January or early February. You need enough liquidity to bridge this "income gap" while covering the heavy outgoings listed above.

Strategies to Protect Your Position

You cannot avoid these seasonal expenses, but you can manage them effectively. Here are four immediate steps to take:

1. Forecast Your Budget to February Move beyond checking this week’s balance. Project your cash flow all the way to February 2026. List every major upcoming payment (Super, Rent, Payroll, Tax) and compare it against expected incoming cash. Identifying a deficit now gives you time to act.

2. Check Your Bank Balance Daily Cash moves rapidly in December. Make it a habit to review your bank balance every morning. This prevents automatic payments from catching you off guard and allows for quick decision-making if funds become tight.

3. Delay Non-Essential Spending Now is not the time for impulsive capital purchases. If an expense is not essential to generating immediate revenue, delay it until February when cash flow stabilizes. Preserve your buffer for payroll and tax obligations.

4. Chase Invoices Immediately Follow up on outstanding invoices today—do not wait until the week before Christmas. If you can collect payment before your clients close their accounts for the holidays, you will secure a much stronger safety net.

Conclusion: Don't Go It Alone

The holiday season should be dedicated to rest, not stress. The key to a relaxing break is the confidence that your financial obligations are covered.

If you are concerned about meeting holiday payroll or January tax obligations, speak with your accountant before issues compound.

At Trinity Accounting Practice, we help business owners forecast cash flow and plan for these seasonal peaks. A quick conversation today can prevent a crisis in January.

Contact Us

Trinity Accounting Practice // 159 Stoney Creek Road, Beverly Hills NSW 2209 // 02 9543 6804 //  Book an Appointment: Ramy Hanna via Calendly // www.trinitygroup.com.au

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