The Christmas shutdown cash gap: plan it in October, not January

In Australia, the summer break isn’t a long weekend. Many builders, manufacturers, wholesalers and professional firms close for two weeks or more, and their customers’ accounts departments do the same. Work you invoiced in late November might not be paid until the last week of January. Meanwhile, the costs keep coming.

What does the shutdown gap look like?

Period	Money in	Money out
Early December	Normal	Normal, plus Christmas stock or bonuses
Mid-December to early January	Slows to a trickle	Holiday pay, rent, loan repayments, insurance renewals
Mid to late January	Starts to recover	Restocking, wages back to full
February	Normal	October–December BAS due 28 February

The dip usually starts in the week before Christmas and bottoms out in mid-January. For businesses that also pay a December-quarter BAS from January takings, February can bite too.

What should you do in October and November?

This is where the gap gets smaller for free:

1. Ask customers when their last payment run is. Then make sure your invoices are in before it.
2. Invoice everything you can before the break. Progress claims, completed stages, recurring services.
3. Chase overdue invoices in November, not December. Our guide to getting invoices paid faster has scripts that work.
4. Talk to suppliers about January terms. Some will let you pay December statements at the end of January.
5. Check your leave liability. Know how much holiday pay will go out while you’re closed.
6. Set aside for the February BAS. The BAS quarter crunch page explains a weekly set-aside.

How big is your January gap?

Map the weeks from early December to the end of February in the cash gap calculator. Enter expected customer payments on the dates they’ll realistically arrive (not the dates on the invoices), and every bill with its due date. The lowest point is your gap; the number of days below your buffer is how long it lasts.

Want January sorted before you down tools? Start a quick enquiry while it’s still business as usual.

How do businesses bridge it?

• A business cash line set up in November, drawn in January, repaid by March. You only pay for what you use. See business cash line.
• A short-term cash loan timed for early January if you know the size of the gap.
• Property-backed cash for larger operations or where several gaps are stacking up.

Arrange it early. Lenders and specialists work through the break, but everything moves faster when you’re not the fifteenth business calling on 3 January.

What about wages over the break?

Staff on annual leave are paid as normal, and under Payday Super their super must reach their funds within 7 business days of each payday. If a shutdown means a large leave payment in one pay run, plan for it in your cash forecast. Our page on cash for wages covers what can and can’t wait.

A shutdown checklist for the last fortnight of trading

Before the doors close, run through this list. Each item either brings cash in earlier or stops it leaving sooner than it has to:

• Every completed job, stage and recurring service invoiced
• Overdue accounts called (not just emailed) with a pre-Christmas payment request
• Customers’ last payment-run dates confirmed in writing
• Supplier statements checked: anything that can be paid at the end of January instead of the start?
• Leave and holiday pay calculated, including super due within 7 business days
• Insurance, registrations and subscriptions due in January noted
• February BAS estimate worked out, with a set-aside plan
• Cash line or bridge arranged and tested, if you need one
• Bank and lender contact details saved in case something comes up over the break

Which businesses feel it most?

Any business whose customers close for summer, but especially:

• Trades, builders and subcontractors working for head contractors who close over the break
• Manufacturers and wholesalers whose customers’ accounts teams stop processing payments
• Professional services firms billing monthly in arrears
• Labour hire and staffing businesses paying wages weekly while clients pay on 30-day terms

Retailers and hospitality venues often have the opposite problem: a busy December followed by a quiet January and a February BAS. See quiet season cash.

An illustrative example

Illustrative only. A Geelong steel fabrication shop closes from 20 December to 12 January. It invoices $210k in late November and early December, but its two largest customers won’t pay until 28 January. Holiday pay, rent and equipment loans over the break total about $95k. The owner sets up a cash line in November, draws $70k in early January and repays it in February.

Have a proper break this year

The best Christmas present for a business owner is knowing January is covered. Tell us what your shutdown looks like. It takes about a minute, there’s no credit check when you enquire, and we won’t hand your details to a heap of lenders. A real person reviews your situation and gives you a call.

Please be accurate about turnover and when customers usually pay after the break. It helps us size the facility to your real January.

Cover my January →