As the end of the year fast approaches, South African businesses find themselves in vastly different trading conditions. For some, the festive season brings a welcome uptick in sales and customer activity. For others – particularly in the B2B and professional services sectors – it often means quieter months, delayed payments, and increased financial pressure.
No matter which camp you fall into, one thing is clear: optimising your cashflow and working capital before December can make the difference between ending the year strong or entering the new year under financial strain. Here are some practical steps South African business owners can take to get ahead.
1. Think About Cashflow Now – Not in December
Many entrepreneurs make the mistake of waiting until December to assess their financial position. By then, it’s often too late. Now is the time to review your cashflow and working capital.
If you plan to apply for business funding, remember that lenders will conduct affordability and risk assessments. You want your financial statements, bank balances, and debtor books to reflect stability and sound management. Being proactive allows you to present your business in the best possible light and secure the working capital you need before the holiday slowdown begins.
2. Work With an Accountant or Business Advisor
If you don’t have a dedicated in-house finance team, lean on your accountant or business advisors. An outside pair of eyes can identify risks and opportunities that an over-optimistic entrepreneur might overlook.
The SME.Tax team is a great example of experienced professionals who can help you interpret your numbers, assess your affordability, and ensure your business is ready for potential funding or expansion. Objective financial guidance at this stage could save you from liquidity challenges later in the year.
3. Check and Clean Up Your Personal Credit Profile
For smaller businesses and sole proprietors, your personal financial profile matters just as much as your business accounts. Many South African lenders will review the entrepreneur’s credit score and personal financial conduct before approving funding.
Now is the time to obtain a copy of your personal credit report from one of the major bureaus (Experian, TransUnion, or Compuscan). Identify and resolve any adverse listings or legacy issues. These can take four to six weeks to clear, so acting early ensures you won’t be caught off guard when you need funding or supplier credit in December.
4. Watch Out for Failed Debit Orders and Unnecessary Expenses
Failed debit orders — whether in your business or personal accounts — are red flags for lenders and can lower your credit score. Take a close look at recurring expenses linked to debit orders or cards, such as digital subscriptions, technology tools, or marketing services you no longer use.
By trimming unnecessary costs and ensuring debit orders go through cleanly, you’ll improve both your financial position and your credibility with financiers.
5. Engage Your Existing Clients Early
Don’t assume that your clients will be available in December. Start conversations now about projects, payments, and retainers. Encourage early invoicing and consider offering cash settlement discounts to clients who pay before year-end.
A proactive approach can help you avoid cashflow crunches caused by clients going on leave or closing their accounts departments for the holidays.
6. Keep Your Tax Affairs Up to Date
Few things can derail a small business faster than a surprise debit order from SARS. The South African Revenue Service has become more proactive about recovering outstanding debts — including directly accessing business bank accounts.
Make sure your tax returns and VAT submissions are up to date, and if you foresee any payment difficulties, engage SARS early. They are often willing to discuss payment arrangements, but only if you approach them before things escalate.
7. Motivate Your Sales Team With Short-Term Incentives
As the festive season nears, sales momentum can dip. Many teams mentally shift into “holiday mode” too early, which can negatively impact your year-end results.
Consider introducing short-term incentives or bonuses to keep your sales team focused and motivated. Even small rewards can drive performance and boost revenue during this critical period, helping you close the year with strong numbers and a healthier cash position.
8. Give Yourself More Working Capital Options By Thinking About Collateral Now
If you put yourself in the shoes of a potential lender, they are going to want to understand whether your December cashflow crunch is a legitimate cashflow issue or whether you are trading month-to-month.
One of their ways to mitigate risk will be to look for collateral including:
- Stock
- Assets such as vehicles or property
- Sureties from the entrepreneurs
Depending on the nature of the asset, the lenders may require site or asset inspection or escrow structures to be put in place. By leaving it too late, entrepreneurs may end up limiting their options and be stuck with the most expensive lenders.
Conclusion: Plan Ahead for a Stress-Free December
Entrepreneurs who take the time now to review and optimise their cashflow and working capital will enjoy a far more relaxed December. By engaging your advisors, reviewing your finances, and tightening up your credit profile, you’ll be in a much stronger position to meet obligations, secure funding, and start the new year on the front foot.
Don’t wait until you’re scrambling to pay suppliers or staff — plan ahead, act early, and protect your working capita
