Strategic cashflow management for seasonal businesses

Seasonality is a common part of running a business in New Zealand. Tourism cycles, weather patterns, school holidays, agricultural seasons, and construction demand all create somewhat predictable peaks and quieter stretches in revenue.  ​

The goal is not to eliminate these cycles, but to manage them in a way that keeps the business steady, compliant and financially comfortable all year round. Here are practical ways to plan for the natural ups and downs.​

Create a rolling 12 to 18 month cash flow forecast for a forward-looking view of how money is expected to move in and out of the business over time.​

This longer view matters more for seasonal businesses because it captures at least one full cycle of highs and lows. It lets you see how strong trading periods need to support slower months and highlights when cash pressure is likely to appear before it becomes urgent. ​

Modelling best-case, expected, and worst-case scenarios helps clarify how much buffer the business needs if sales fall short or costs rise unexpectedly. ​

In New Zealand, the forecast should also account for the timing of the following:​

These commitments continue regardless of how busy or quiet the business is. ​

A cash reserve allows you to cover fixed expenses during slower periods without scrambling for short-term solutions. ​

During high-income months, deliberately set aside part of the profit to support the quieter season ahead. Many seasonal businesses aim to reserve around 20% to 30% of peak earnings to cover several months of operating costs such as rent, wages, repayments, and insurance. ​

Keeping this money in a separate account creates a clear distinction between working cash and stability funds. ​

Having this cash reserve in place makes decision-making calmer and prevents the need for rushed borrowing when revenue slows. ​

Not all costs need to stay fixed throughout the year. Reviewing where expenses can scale up or down can make a significant difference during low-income months. ​

Common areas for flexibility include: ​

Some expenses are essential during peak periods but unnecessary when demand drops. Planning ahead to pause or reduce them preserves cash without harming long-term performance. ​

Even small cost adjustments, when planned in advance, can improve cash resilience and reduce the need for reactive decisions during slower months.​

While seasonality is unavoidable for many industries, some businesses can create additional income outside peak hours. ​

Examples include offering off-season services, advance booking incentives, maintenance work, consulting, or packaged deals that encourage customers to commit earlier. ​

Payment structures can also help. Annual pricing, retainers, subscriptions, deposits, or pre-sales spread customer payments across the year instead of concentrating revenue into a short window. ​

Even partially smoothing income reduces reliance on reserves or finance during slower months.​

When sales are high, it's easy for credit control to slip. This can create problems later when income slows but unpaid invoices remain outstanding. Invoices should be issued promptly, with clear terms that are consistently enforced. ​

For larger jobs or higher-risk work, deposits or upfront payments can protect cashflow. Some businesses also encourage faster payments by offering small early-settlement incentives. ​

Strong habits during busy periods make quiet periods much easier to manage. ​

The timing of outgoing payments can influence cashflow as much as incoming revenue. Where possible, work with suppliers to agree on payment terms that better match when income is received. Staged payments or extended terms can ease pressure without affecting relationships. ​

Bulk buying ahead of busy periods can be effective, but only if it doesn't tie up cash needed later. Careful inventory planning ensures money is available when revenue dips. Managing payables intentionally helps avoid unnecessary borrowing. ​

Overdrafts and working capital facilities can be useful for seasonal businesses when they are part of a plan. They work best as deliberate bridges between high and low periods.​

Used intentionally, finance can help cover timing gaps between income and expenses without disrupting day-to-day operations. Used reactively, it can create ongoing pressure long after the slow season has passed. ​

Long-term debt is generally better suited for long-term investments, such as equipment, expansion, or infrastructure that supports growth. Using it to manage short-term cash shortfalls can lock the business into repayments that no longer align with revenue cycles. ​

The transition between busy and quiet periods is when regular reviews becomes most valuable. ​

Comparing actual results to your forecast each month helps identify small issues before they grow. Monitoring metrics such as debtor days, creditor days, margins, and stock levels provide early warning signs if cashflow starts tightening. ​

Early adjustments are far easier than last-minute corrections. ​

Seasonal income can make tax obligations feel unpredictable, particularly when payments are due during slower months. Setting aside money for tax as income is earned helps avoid cashflow shocks later. ​

Seasonality does not have to create financial stress. With the right systems in place, busy periods can strengthen the business and support the months that follow.​

Beany supports New Zealand businesses with cashflow forecasting, tax planning, and ongoing financial clarity, helping owners make informed decisions no matter the season. If you’re looking for an accountant for your business, get in touch or book a call with us.​