When 1 January rolls around, many people set personal resolutions—exercise more, eat healthier, get finances in order. The start of a new financial year is no different. It’s a chance to make better decisions around your cash flow. If last year had its share of costly cash flow mistakes, it’s time to reset.
At Geddes, we know the ins and outs of cash flow challenges from businesses of all sizes. As the new fiscal year begins, we’re sharing actionable advice to help you avoid the common pitfalls that can sneak up on you. Let’s make sure this year is the one where you get cash flow right.
Why A New Financial Year Is A Good Time To Make Cash Flow Improvements
Every twelve months, the financial clock resets. Governments, businesses, and organisations work within this structured timeline to manage budgets, track income, and meet financial obligations.
Companies must report earnings, and tax laws require records to be finalised before the year closes.
For South Africa, the 2026 financial year runs from 1 March 2025, to 28 February 2026.
A new financial year is a great time to focus on the bigger picture of your business’s finances. What worked? What didn’t? How can financial strategies evolve for better outcomes?
Review past performance, understand trends, and realign strategies. Starting the year with a strong focus on your finances can set a positive tone for growth and stability throughout the year.
1. Failing to Forecast Cash Flow
Don’t be that business that ignores cash flow forecasting. Without this regular check, it’s like driving blindfolded – you’re bound to hit a bump. When payments are delayed or unexpected costs pop up, it can lead to serious cash crunches.
Our Tip: Set time aside each month or quarter to work out a cash flow forecast. Keep an eye on it throughout the period to adjust for any shifts in your business. With this foresight, you can avoid nasty surprises and ensure your business runs smoothly, even when things go off-track.
2. Ignoring Unpaid Invoices
Delays in cash flow are often caused by ignoring overdue invoices. Without follow-ups, clients may forget or take longer to pay. This is a slippery slope to serious cash flow issues. It can hold up the money you need to run your business effectively and pay your own bills.
Our Tip: Get organised with a system that tracks overdue payments and follow up regularly. Be polite but firm in your communication. Offering payment plans or discounts for early settlement can encourage quicker payments.
3. Holding Excess Inventory
Overstocking is one of the quickest ways to strain your finances. It might seem like a good idea to buy large quantities, but when products sit unsold, your money gets tied up in items that aren’t making you a return. Plus, storage and insurance fees quickly add to the burden.
Our Tip: Track your sales carefully and order stock based on demand. Using a just-in-time approach helps reduce the chances of overstocking. By keeping inventory low, you can use your cash where it counts.
4. Not Accounting for Seasonal Sales Fluctuations
If your business goes through busier and quieter months, ignoring those cycles can leave you short when sales slow down. Without planning, you might struggle to cover rent, salaries, or stock, putting pressure on your finances.
Our Tip: Track your busiest and quietest months, then use that data to plan ahead. Set aside extra cash during peak times so you’re not caught off guard later. Running special offers or introducing new products can help keep income steady. Financial planning isn’t just about today, it’s about making sure your business thrives in every season.
4. Underestimating Operating Expenses
Focusing only on the regular expenses like rent and salaries is a mistake many businesses make. The real trouble lies in overlooking fluctuating expenses. These might include costs for marketing, inventory, or unexpected repairs, and if you’re not prepared for them, they’ll drain your cash reserves faster than you expect.
Our Tip: Keep a close eye on both regular and unpredictable costs. Make sure your cash flow forecast is a full reflection of your business’s reality. Set aside funds for the unexpected, and be ready to handle any surprises without throwing your finances into chaos.
5. Expanding Too Quickly Without Sufficient Cash Flow
Rapid expansion sounds exciting, but if your cash flow can’t keep up, it’s a serious risk. More staff, locations, or stock without financial backing can stretch resources too thin.
Our Tip: Growth should be intentional, not rushed. Test expansion strategies in a controlled way, keep a close eye on cash flow, and ensure every step forward is backed by a solid financial plan. A business that scales wisely stays strong, while reckless expansion leads to unnecessary setbacks.
Final Word
If cash flow was unpredictable last year, now is the time to put stronger systems in place. Maybe payments were late, expenses weren’t tracked closely enough, or cash reserves ran too low. The good news? These are fixable issues.
Geddes understands that businesses need more than just a strategy to keep the wheels turning – they need real financial support. Our cash flow solutions provide the financial boost to help you cover expenses, seize new opportunities, and fuel growth in the year ahead.