Cashflow is the number one reason small businesses in New Zealand struggle. In most cases it comes down to timing, pricing, mindset or planning.
The good news is that improving cashflow does not require dramatic changes.
Small, consistent actions can make a noticeable difference within weeks.
Here are 20 practical ways that you can immediately apply as a New Zealand business owner.
1. Shorten Your Payment Terms
Shorter terms help you get paid faster.
Many NZ businesses still use the 20 days following invoice model. It is slow, outdated and creates unnecessary cash gaps. 10 days, 7 days, or ‘payment on completion’ all reduce the waiting period.
How to implement
If you think clients will push back, explain that shorter terms support the level of service you provide. Most clients accept it without issue.
2. Invoice Faster And Follow Up Consistently
Send invoices immediately, and automate reminders.
Every day you delay sending an invoice is a day you are financing someone else’s business.
Set up follow ups at 7 and 14 days. When clients know you invoice promptly and follow up consistently, they pay faster.
How to implement
Use tools such as Xero which has allows for fast invoicing and automatic reminders.
3. Increase Your Prices
Cashflow pressure is often the result of undercharging. Costs rise every year, but pricing sits still.
Focus especially on low margin and high workload services. When pricing matches the true effort required, your business becomes healthier and more predictable.
How to implement
Review prices at least once a year. Even a small increase improves margins and strengthens cashflow.
4. Keep GST in a Separate Bank Account
One of the biggest cashflow issues in New Zealand is using GST money as working capital. When GST is due, business owners feel the pressure.
How to implement
Transfer GST into a separate account as soon as payments come in. This makes GST periods predictable, instead of stressful.
5. Charge Deposits And Progress Payments To Your Customers
Asking for deposits filters out tyre kickers and protects your cashflow. Waiting until the end of a job to get paid is a slow and risky model.
Trades, consultants, creatives, contractors and project based businesses all benefit from progress payments. It ensures you are not funding the job out of your own pocket.
How to implement
Aim for 30 percent upfront, 40 percent halfway and the final 30 percent on completion.
6. Set up Automatic Direct Debits To Collect Payments
This is one of the simplest ways to stabilise cashflow. Tools like GoCardless or Stripe let clients authorise automatic payments when they sign up. This removes the chase, reduces overdue invoices and provides predictable income.
Once clients are set up, payments become effortless.
How to implement
The best time to introduce this is during onboarding. Use tools such as Stripe and GoCardless to speed up collection.
7. Use Online Proposal and Acceptance Tools
Modern proposal tools allow clients to review your quote, sign your engagement and set up payment in one step. This speeds up acceptance and ensures you get paid sooner.
It also reduces admin time, keeps everything in one place and prevents delays that normally occur when proposals sit unread in inboxes.
How to implement
My personal recommendation is Ignition and we have completely eliminated debtors in our business using this. Here’s a gift for 50% off for 3 months.
8. Review Your Software Stack and Cancel What You Don’t Use
Many small businesses pay for software they no longer use. These costs add up over time and quietly drain cash.
This simple audit can save hundreds each month.
How to implement
Review your subscriptions every six months. Cancel unused tools, downgrade expensive plans and consolidate where possible.
9. Renegotiate Your Phone, Internet and Insurance Costs
Phone, internet and insurance providers often give better pricing to new customers than long term ones.
Even small monthly savings compound over the year.
How to implement
Contact your current providers and ask for retention offers and market rates. Review merchant service fees and payment processing charges as well.
10. Share, Outsource or Move Your Office Space into Shared Office
Office space is one of the biggest fixed costs for many businesses. This shift lowers overheads without affecting service quality.
How to implement
If you have spare rooms, consider subleasing. If your team can work remotely, reduce your footprint or move to co-working spaces or meeting room rentals.
Use platforms such as Sharedspace to list your own office space.
11. Negotiate Better Terms With Your Suppliers
Cashflow gets tight when customers pay slowly but suppliers want payment immediately.
Trade accounts can also help you spread out material costs over time. Even a small improvement in supplier terms gives your business more breathing room.
How to implement
Negotiate better terms where possible. Aim for fourteen days or twenty days following invoice. Ask for extended terms during slower months.
12. Build a One Month Cashflow Buffer
Many NZ small businesses operate with less than one month of expenses saved. A small buffer protects you from GST spikes, provisional tax, seasonal dips and unexpected bills.
How to implement
Start by aiming for one month of expenses. Transfer a fixed amount each week into a separate savings account. Over time this becomes one of the strongest stabilisers for your cashflow.
13. Forecast Cashflow Monthly
A simple monthly cashflow forecast shows you what money is coming in and what is going out. It helps you plan for GST, PAYE and provisional tax. It also highlights tight months early so you can adjust before it becomes a problem.
Cashflow pressure reduces dramatically when you can see what is coming.
How to implement
A spreadsheet is enough. Update it monthly.
There are 2 ways to do this:
- Talk to your accountant to help you with this; or
- Download a free version from this article here.
14. Save for Tax (Transfer Money Aside for Income Tax)
Tax is one of the biggest cashflow shocks for NZ businesses. Provisional tax especially catches people by surprise.
How to implement
Transfer a percentage of every invoice into a dedicated tax account. Even a rough estimate helps. When tax time arrives, the money is already there and cashflow stays stable.
15. Use Tax Pooling to Smooth Provisional Tax
Instead of paying IRD directly, you can buy tax through a tax pooling provider at a lower interest cost and avoid late payment penalties.
Tax pooling is an IRD approved system that helps you manage provisional tax without the stress of paying large amounts on fixed dates.
It is especially useful if your income fluctuates, if you miss a payment or if upcoming due dates are too tight for cashflow. Tax pooling smooths timing, reduces interest costs and gives you more flexibility. Many small business owners do not use it simply because they do not know it exists.
How to implement
Talk to your accountant or directly reach out to the team at PwC Tax Pooling Solutions, Tax Traders or TMNZ.
16. Act Quickly On Late Payers And Overdue Debts
If a client is overdue, act quickly. Do not delay sending them to collections. Your terms should state that recovery costs are recharged. Otherwise you become the client’s bank.
Late payment should not become normal.
How to implement
Strengthen your credit control processes. Send reminders early. Follow up consistently. Set clear expectations.
For chronic late payers, stop extending credit. Move them to prepayment terms or stop working with them altogether. This protects your cash, your time and your stress levels.
17. Use Short Term Finance Tools When Cashflow is Tight
Short term finance can help smooth timing issues.
- Invoice financing helps if you wait long periods for payment.
- Working capital loans can help cover seasonal dips.
- Trade finance can help stock heavy businesses without straining cashflow.
These tools should be used for timing problems, not to fund ongoing losses. When used properly, they provide flexibility without creating long term pressure.
How to implement
Compare loan options easily and make an informed decision using lending marketplaces such as Bizzy. You can get a free quote within 24 to 48 hours.
For more complex and long-term financing needs, message me directly and I can introduce you to our preferred brokers.
18. Build Recurring Revenue
Predictable income is one of the strongest cashflow stabilisers. Even a small amount of recurring monthly revenue reduces volatility and makes planning easier.
Recurring revenue builds resilience and creates steady inflows throughout the year.
How to implement
Look for services that can be packaged into monthly or quarterly plans.
19. Outsource Payroll, GST And Bookkeeping to Experts
Doing everything in house can be inefficient and costly. Tasks like payroll, GST and bookkeeping are usually cheaper, faster and more accurate when outsourced to specialists.
This reduces errors, avoids penalties and frees up your time to focus on revenue generating work.
How to implement
Contact Finex Chartered Certified Accountants to find out how much you can save.
20. Claim All Business Expenses Correctly
Many business owners miss legitimate deductions simply because they are unsure what they can claim. This increases tax unnecessarily.
Make sure you are claiming home-office expenses, vehicle costs, entertainment, meals, and any other genuine business costs properly. Proper record keeping maximises deductions and reduces your tax bill, which improves cashflow.
Even small savings add up over a year and improve cashflow. A well structured expense claim can significantly reduce your tax bill.
How to implement
If you are unsure about a particular expense, check the IRD guide or speak to a tax professional.
Bonus: Get your Free Cashflow Fix Checklist
Message me directly if you’d like a free one-page summary with 22 practical cashflow strategies you can apply immediately which includes:
- 7 actions to improve incoming cash
- 5 ways to reduce outgoing costs
- 5 steps to manage tax without surprises
- 5 strategies to strengthen long term cashflow
All on one page, simple and easy to use.
My Personal Thoughts
Cashflow improves when you make small, consistent adjustments.
You do not need to change everything at once.
Choose two or three of the strategies above and put them into action this month.
You will start to see the difference quickly.
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