As we head towards the end of the year, many small business owners are starting to think about Christmas, holidays and taking a well earned break.
For some businesses, December is one of the busiest times of the year. For others, it can be a quieter period as customers and suppliers close for the holidays.
Regardless of how your business operates, one thing is certain: a little preparation before Christmas can make a big difference to your cash flow and help you start the new year on the right foot.
The last thing you want is to spend your holiday worrying about unpaid invoices, outstanding bills, wages or unexpected cash shortages.
Here are eight things I recommend small business owners take care of before the Christmas break.
1. Review your cash flow before the holidays
Cash flow is particularly important during the Christmas and New Year period.
You might have several weeks with reduced income, but your regular expenses don’t necessarily stop.
Rent, insurance, vehicle repayments, loan repayments, software subscriptions and other operating costs may continue even when your business is closed.
Before the holiday period, prepare a simple cash flow forecast covering December and January.
Consider:
- How much money do you expect to receive before Christmas?
- Which customers still owe you money?
- What expenses and supplier payments are due?
- Will you have enough money to cover wages and other employee costs?
- Do you have sufficient funds to cover your January expenses?
Knowing what is coming in and going out will help you avoid unnecessary financial pressure.
2. Follow up outstanding invoices and get paid
One of the simplest ways to improve your cash position before Christmas is to collect money that is already owed to you.
Many businesses make the mistake of leaving their invoicing and debtor follow-ups until after the holidays.
Unfortunately, this can mean waiting several additional weeks for payment.
Before closing for Christmas:
- Send out any outstanding invoices.
- Follow up overdue accounts.
- Contact customers who have not paid.
- Make sure invoices have clear payment terms.
- Consider requesting deposits or progress payments for work scheduled in the new year.
If you use Xero, you can review your aged receivables report to identify customers with outstanding balances and follow up accordingly.
Remember, completing work is only half the job. You also need to collect the money.
3. Plan for your January expenses
January can be a difficult month for businesses that experience a seasonal slowdown.
You may have fewer customers, reduced trading activity or delayed payments, but your expenses will continue.
It is important to put enough money aside before Christmas to cover your January commitments.
These may include:
- Employee wages and related costs.
- Superannuation obligations.
- Rent and utilities.
- Vehicle and equipment finance repayments.
- Insurance premiums.
- Supplier accounts.
- BAS and other tax obligations.
I also recommend keeping money set aside for GST and PAYG withholding rather than treating these funds as available working capital.
Having a separate bank account for tax obligations can make this easier to manage.
4. Make sure your bookkeeping is up to date
If you leave your bookkeeping until January, you may find yourself returning to a backlog of transactions, missing receipts and unreconciled bank accounts.
Before the break, take some time to bring your accounting records up to date.
In particular:
- Reconcile all available bank transactions.
- Check that business expenses have been correctly categorised.
- Make sure outstanding customer invoices are recorded.
- Review supplier bills and payments.
- Check that loan and finance accounts are up to date.
- Make sure you have copies of relevant invoices and receipts.
If you use Xero, keeping your bank feeds reconciled and your accounts organised makes it much easier to understand your financial position.
It also means your accountant can work with more accurate information when preparing your BAS and financial reports.
5. Check your payroll, superannuation and employee entitlements
If you employ staff, there are a few additional things to consider before closing for Christmas.
Make sure your payroll is up to date and that you have planned for any wages, leave payments and other employee costs during the holiday period.
You should also review:
- Annual leave balances.
- Planned staff leave and business shutdown arrangements.
- Public holiday arrangements.
- Payroll processing dates.
- Superannuation payments and applicable deadlines.
Remember that employee entitlements and shutdown arrangements need to comply with the relevant employment laws, awards and agreements.
With the introduction of Payday Super from 1 July 2026, employers also need to make sure their payroll and superannuation processes are operating correctly.
Don’t leave these matters until the last minute.
6. Review your supplier accounts and upcoming payments
Your suppliers may also be closing over Christmas, which can affect deliveries, payment arrangements and the availability of materials or stock.
If your business relies on suppliers, contractors or tradespeople, make sure you understand their holiday trading arrangements.
Before the break:
- Check which supplier invoices are outstanding.
- Confirm payment due dates.
- Identify any important orders that need to be placed before Christmas.
- Check whether you need additional stock or materials.
- Make sure essential suppliers are aware of any changes to your operating hours.
For trades and construction businesses, this is particularly important. A delay in materials or equipment can affect jobs scheduled for January.
7. Check your BAS and other ATO obligations
The Christmas period doesn’t mean your business tax and reporting obligations disappear.
Depending on your reporting arrangements, you may still have BAS, PAYG withholding, superannuation or other obligations to manage.
Before closing, check your upcoming due dates and make sure you have allowed for any payments that may fall during or shortly after the holiday period.
I recommend checking your ATO account and making sure there are no outstanding lodgements or unexpected balances.
If you use a registered tax agent, speak with them before the holiday period if you are unsure about upcoming lodgement or payment requirements.
The important thing is to plan ahead rather than deal with an unexpected ATO obligation when you return.
8. Plan your return to business in January
It is easy to focus on closing the business for Christmas and forget about what happens when you reopen.
A little planning now can make the first few weeks of January much easier.
Before you finish for the year:
- Confirm your reopening date and communicate it to customers.
- Schedule any work already booked for January.
- Review outstanding quotes and customer enquiries.
- Make a list of important tasks to complete when you return.
- Check that your accounting and business records are up to date.
You should also take the opportunity to review what worked well during the year and what could be improved.
Think about your sales, profit margins, expenses, customer relationships and business goals.
January is a good time to start putting those plans into action.
A little preparation now can save a lot of stress later
Running a small business is demanding, and it is easy to get caught up in the day-to-day work.
However, taking a few hours to review your finances and prepare for the Christmas break can save you considerable time and stress in the new year.
The key is to understand your cash position, collect outstanding payments, plan for upcoming expenses and make sure your bookkeeping and compliance obligations are under control.
Most importantly, give yourself the opportunity to enjoy a well-earned break without constantly worrying about your business finances.
Need a hand getting your business ready for the new year?
At SWOT Accountants, we work with small businesses, sole traders and companies throughout Cleveland, Capalaba and the Redlands.
We can help you stay on top of your bookkeeping, BAS, tax obligations and business finances, so you can spend less time worrying about the numbers and more time running your business.
If you would like help getting your accounts in order before the new year, get in touch with SWOT Accountants.
SWOT Accountants – Empowering Your Business Success with Passion and Integrity.