The Christmas and New Year period can have a significant impact on business finances, regardless of whether it is your busiest time of year or you’re preparing to close for a few weeks.
For businesses expecting increased demand, additional stock purchases, staffing costs and supplier payments can place extra pressure on cash flow. For those reducing operations or closing temporarily, expenses continue even when revenue slows.
There are also employee leave entitlements, payroll obligations, customer payments and reporting deadlines to manage, often while business owners, staff and suppliers are taking time off.
November is a good opportunity to review your financial position and make arrangements for the months ahead.
Here are five areas worth reviewing before the holiday period begins.
1. Know what your cash flow will look like over December and January
A healthy bank balance in November doesn’t necessarily mean there will be enough money available to cover everything in December and January.
The timing of incoming payments and outgoing expenses can change considerably over the holiday period. Customers may take longer to pay invoices, while wages, rent, loan repayments and other regular commitments continue.
Businesses experiencing increased Christmas trading may also need to pay for additional stock, staff or operating expenses before receiving the associated revenue.
Reviewing your cash flow forecast can help identify periods when money may be tight and where adjustments might be needed.
Consider:
- What revenue you realistically expect to receive during December and January.
- Which customers may delay payments because of holiday closures.
- Whether additional stock, wages or other seasonal expenses are expected.
- What regular payments, including super, tax and supplier accounts, will fall due.
- Whether your business has sufficient funds available to meet its commitments during January.
Looking at your financial results from the previous Christmas period can provide a useful starting point, particularly when adjusted for changes in staffing, operating costs and business activity.
Your First Class Accounts bookkeeper can help you review your financial position and prepare cash flow forecasts so you have a better understanding of what to expect over the coming months.
2. Review payroll and employee leave arrangements
If you employ staff, Christmas and New Year can bring additional payroll considerations.
Employees may be taking annual leave, working additional hours or covering shifts for colleagues. Some businesses will also engage casual or temporary employees to help manage increased demand.
Before the holiday period, it’s important to review employee leave balances, planned rosters and applicable pay entitlements.
If your business is planning a temporary shutdown, there are specific rules about directing employees to take annual leave. These depend on the relevant award or enterprise agreement, or whether an employee is covered by neither.
Some awards also require employers to provide written notice well in advance of a shutdown. Make sure you have checked the requirements that apply to your business and provided any necessary notice.
Public holidays also need particular attention. For example, when an employee is entitled to payment for a public holiday that falls during their annual leave, that day generally should not be deducted from their annual leave balance.
Payroll arrangements should account for applicable penalty rates, leave loading, overtime and any changes to ordinary working hours.
Reviewing these details before December can help reduce payroll errors and ensure employees receive their correct entitlements.
Your First Class Accounts bookkeeper can help you review employee leave balances, plan payroll schedules and ensure the correct pay rates and entitlements are applied throughout the holiday period.
Also ask us about managing your payroll, including processing wages, recording employee leave and managing pay schedules to help ensure your employees are paid correctly and on time.
3. Make sure Payday Super is covered during the holiday period
Christmas 2026 will be the first holiday period since Payday Super commenced on 1 July 2026.
Under the new requirements, employers must pay super guarantee contributions alongside their regular payroll, with contributions generally required to reach employees’ super funds within seven business days of payday. Different timeframes apply in certain circumstances.
This means businesses need to account for super payments each time employees are paid, including throughout December and January.
Public holidays, changes to payroll schedules and reduced staffing can affect how payments are processed and approved.
If you plan to process payroll early, close the business or have someone else managing payments while you’re away, it’s worth confirming that your super payment arrangements will continue to meet the required timeframes.
You should also check how rejected or unsuccessful super payments will be identified and resolved when the usual payroll staff are unavailable.
Your First Class Accounts bookkeeper can assist with reviewing payroll processes, payment schedules and super obligations to help keep everything on track over the holiday period.
4. Get customer invoices and supplier payments organised
Customer and supplier holiday closures can affect the timing of payments, particularly for businesses that invoice clients after completing work or providing services.
An invoice sent in late December may not be processed until January if the customer’s accounts team is away. This can leave a longer gap between completing the work and receiving payment.
Before December, review your outstanding customer accounts and identify invoices that are overdue or approaching their payment dates.
Where possible, send invoices promptly and check whether major customers have earlier payment processing dates over Christmas.
It’s also worth reviewing your own supplier accounts.
Identify which payments will fall due while your business is closed or key staff are on leave. Confirm who will be responsible for approving payments and whether any scheduled transactions need to be adjusted.
For businesses expecting increased trading, keeping invoicing and accounts receivable processes running consistently is equally important. A busy December can quickly lead to a backlog of financial administration if these tasks are overlooked.
Having your bookkeeper manage receivables, reconciliations and payment schedules can help maintain regular processes, even when business operations change.
5. Plan how bookkeeping and reporting will be managed
Whether you’re closing for a few weeks or operating throughout Christmas, your bookkeeping and financial reporting responsibilities continue.
Bank transactions still need to be reconciled, financial records maintained and reporting obligations met.
If the people normally responsible for providing information or approving transactions will be away, it’s important to agree on alternative arrangements beforehand.
Speak with your bookkeeper about:
- Your business trading hours and any planned shutdown dates.
- Payroll dates, staff leave and any changes to normal pay arrangements.
- Who will be available to provide invoices, receipts and other financial records.
- How supplier payments and other transactions will be approved.
- Upcoming BAS, IAS and other reporting or payment obligations.
- When financial reports will be needed during December and January.
This is also an opportunity to review how your bookkeeping systems are working.
If your business regularly experiences delays collecting receipts, approving invoices or providing payroll information, addressing those issues before the holiday period can make ongoing financial administration easier.
Keeping records current throughout December also means you’ll have more reliable financial information available when reviewing your business performance in January.
Prepare now for the months ahead
The Christmas and New Year period affects every business differently, and the financial arrangements that work for one business may not be suitable for another.
Understanding what your business needs to pay, when money is expected to arrive and how essential financial tasks will be managed can help you make informed decisions throughout December and January.
Your First Class Accounts bookkeeper is here to help you prepare.
From cash flow forecasting and payroll to accounts management, reconciliations and reporting, we can help ensure your financial processes continue to run efficiently over the holiday period.
Talk to your local First Class Accounts bookkeeper about your Christmas and New Year arrangements and what needs to be organised before December arrives.
