For an established manufacturer, wholesaler, trade supplier or service business in Moorabbin, in Melbourne’s south-east, planning for the final quarter does not necessarily mean finding more money to spend.
Sometimes the more important decision is how much cash not to spend.
By 23 September, the Christmas trading period is still ahead. Businesses may be starting to consider stock orders, materials, additional staff, equipment servicing or customer work expected through October, November and December.
A business might have enough money available to cover those commitments today.
But that raises another question:
How much working cash should remain after those commitments have been made?
A business can afford a stock order, a major supplier payment or a new project individually and still leave itself uncomfortably short once payroll, tax, rent and slower customer payments are added.
Available cash and available-to-spend cash are not the same thing
Seeing $250,000 in the business account does not necessarily mean the business has $250,000 available for a new purchase.
Some of that money may already be needed for:
payroll
superannuation
supplier accounts
GST and tax
rent
equipment finance
vehicle repayments
insurance
freight
ordinary operating expenses
Before committing more cash to an end-of-year stock build or additional work, separate what is already effectively spoken for from what is genuinely available.
This can prevent the business from funding one opportunity successfully while creating pressure somewhere else.
Start with the cash buffer you want to preserve
Businesses often calculate how much they can spend and then see what is left.
It can be useful to reverse the process.
Decide how much cash the business wants to retain as an operating buffer.
Then assess what can comfortably be committed above that amount.
The right buffer will vary considerably between businesses.
A company with predictable recurring income and short customer payment cycles may require less.
A manufacturer carrying stock and commercial debtors may want more.
A business with vehicles, machinery or other assets that can create unexpected repair bills may also want additional room.
There is no universal figure.
The point is to make the decision deliberately rather than discovering afterwards that nearly all available liquidity has disappeared.
A larger stock order can be affordable and still leave the business exposed
Suppose a wholesaler has $300,000 available and is considering an additional $180,000 stock purchase for expected end-of-year demand.
The business can technically pay the supplier.
But after the purchase, $120,000 remains.
Now include the next few weeks of:
wages
rent
freight
tax
other supplier accounts
finance repayments
The actual buffer may become much smaller.
Then consider what happens if one major customer pays two weeks late.
The stock order itself may have been commercially sensible.
The issue is the amount of cash left behind while that stock works its way through the business.
Preparing early does not mean buying everything early
There can be good reasons to increase stock before demand arrives.
Supplier lead times may be long.
Certain products may be difficult to obtain later.
A business may want to protect itself against supply disruption.
But preparing early does not necessarily mean purchasing the maximum possible amount immediately.
It may be worth considering whether orders can be:
staged
split across suppliers
timed closer to expected demand
aligned with confirmed customer orders
negotiated under different payment terms
Holding enough stock and preserving enough cash are both legitimate business objectives.
The best answer may involve balancing the two.
Manufacturers should consider the cash already sitting in production
A manufacturing business may have money tied up in several places without it appearing as available cash.
Raw materials have been purchased.
Work is in progress.
Finished goods may be waiting for dispatch.
Customer invoices may already be outstanding.
If production increases through the final quarter, the dollar amount tied up at each stage can increase.
The business could therefore have strong assets and a healthy sales pipeline while the actual bank balance becomes tighter.
Before increasing production, calculate what additional cash is likely to sit in:
raw materials ? work in progress ? finished goods ? debtors
That complete chain provides a better picture of the working capital requirement.
Trades and service businesses need a buffer too
A Moorabbin trade or commercial service business may carry little physical inventory.
Its working capital can instead be tied up in labour and projects.
A new contract might require:
additional employees
subcontractors
parts
vehicles
fuel
equipment hire
materials
The business may fund those expenses before the customer pays.
If several projects overlap, the available cash buffer can fall quickly.
This is why cash reserves should not be assessed only against stock.
Any business that incurs costs before customer receipts arrive needs enough working capital to carry that period.
Customer payment terms determine how quickly the buffer rebuilds
Once the business spends money on stock, materials or project delivery, how quickly does that cash return?
This depends partly on sales.
It also depends on customer payment behaviour.
A B2B customer may receive 30-day terms.
If it routinely pays in 40 days, the business should use 40 days in the forecast.
If a large customer commonly takes 45 or 50 days, allow for that.
The cash buffer has to survive the real payment cycle, not the payment terms written on the invoice.
Late-year invoices deserve particular attention
On 23 September, December is still well ahead.
But businesses can already identify work and orders likely to create invoices later in the year.
A project completed in November might be invoiced at month-end.
A December delivery could create an invoice payable in January.
Commercial customers may have staff on leave or reduced payment processing around the holiday period.
The planning question is not:
Will every customer pay late at Christmas?
They will not.
It is:
If some significant receipts arrive later than we currently expect, does the business still have enough room?
That is a useful stress test.
One delayed customer should not control the entire bank account
Customer concentration becomes particularly important when cash reserves are being reduced.
Imagine a business relies on one large customer for a significant portion of its monthly receipts.
If that customer owes $180,000 and pays ten days late, the effect can be substantial.
If the business has retained a healthy cash buffer, the delay may simply be inconvenient.
If most available cash has already been committed to stock or expansion, the same delay can become a problem.
Before deciding how much cash can be spent, look at how dependent the forecast is on individual customer receipts arriving exactly when expected.
Protecting cash does not always mean cancelling investment
A business might need to buy equipment or replace a vehicle before the final quarter becomes busier.
The question is how the purchase should be funded.
If an eligible asset is expected to remain productive for several years, using all available cash upfront may not always provide the best working capital outcome.
Depending on the circumstances, asset finance may allow the business to preserve more cash for stock, wages, suppliers and everyday operating expenses.
That does not mean every asset should be financed.
It means the effect on liquidity should be considered alongside the cost of borrowing.
Ask what happens after the purchase
This is one of the simplest cashflow questions a business can use.
Before a major payment is made, calculate:
What does the bank account look like immediately afterwards?
Then go further.
What does it look like after the next payroll?
After tax?
After rent?
After the next major supplier account?
Before the next large customer receipt?
That sequence can reveal whether a purchase that appears comfortable today could create pressure several weeks later.
Trade finance may help preserve cash used for supplier purchases
Where a wholesaler, distributor or manufacturer needs to fund eligible stock, inventory or raw materials, trade finance may be one option to investigate.
Depending on the lender and transaction, trade finance may assist with eligible supplier purchases from Australia or overseas.
This may allow the business to retain more of its existing cash while stock moves through the procurement and sales cycle.
The lender may consider:
business trading history
financial performance
supplier details
transaction size
goods being purchased
existing commitments
expected repayment source
Trade finance will not suit every purchase.
But where the alternative is using most of the business’s available working cash, it can be worth comparing the two approaches.
Debtor finance may address cash already sitting outside the business
Sometimes a business does not need more sales or more stock.
It needs faster access to money it has already earned.
If commercial invoices remain outstanding, a significant amount of working capital may be sitting in the debtor ledger.
For eligible B2B businesses, debtor or invoice finance may provide earlier access to part of the value of qualifying receivables.
Lenders generally consider the customers, invoices, payment history and overall debtor ledger.
This can be relevant when the business wants to preserve cash for the coming months without waiting for every customer to complete its normal payment cycle.
Do not use short-term cash for every long-term need
Working capital is valuable because businesses need it repeatedly.
Using a large portion of it for an asset that will remain in the business for five or ten years can create a mismatch.
Likewise, funding a temporary stock requirement with inappropriate long-term debt may not always be ideal.
Different expenses have different useful lives and cashflow cycles.
It can help to separate:
long-term assets
stock and supplier purchases
project costs
unpaid invoices
everyday operating expenses
Then consider finance structures that correspond more closely with each requirement.
Tax money should not accidentally become Christmas working capital
Another area worth separating is tax.
A healthy bank balance can sometimes include money that will later be needed for GST, PAYG or other obligations.
If that money is used to purchase stock or fund growth, the business may appear comfortable today and then face pressure when tax becomes due.
When calculating the available buffer, include known or expected tax commitments.
The objective is to understand what cash is genuinely free to support future trading.
A buffer creates flexibility when opportunity appears
Preserving working capital is not only defensive.
It can also allow a business to respond to opportunity.
A customer may suddenly want a much larger order.
A supplier might offer attractive pricing.
A competitor may leave the market.
A profitable short-notice project could appear.
A business that has committed nearly all available cash weeks earlier may have difficulty taking advantage.
Maintaining liquidity can therefore have commercial value beyond simply protecting against problems.
Existing facilities can form part of the buffer
Cash in the bank is not the only source of liquidity.
A business may already have:
an unused overdraft
a line of credit
debtor finance
trade facilities
other available commercial funding
The important point is understanding how much capacity genuinely exists.
If an overdraft limit is $200,000 but the business normally uses $170,000, the practical buffer is much smaller than the headline limit.
Review expected usage through the entire final quarter rather than assuming today’s unused capacity will remain available.
Build three scenarios instead of one
Late September is a good time to test several outcomes.
Expected scenario
Sales and customer payments occur broadly as forecast.
Stronger-demand scenario
Sales increase, requiring more stock, materials or payroll before the extra receipts arrive.
Slower-cash scenario
Sales remain healthy, but a few larger customer payments move later than expected.
If the business has enough liquidity across all three scenarios, it may be well positioned.
If one relatively modest change creates a substantial shortfall, the business has identified something worth addressing before commitments increase.
January needs its own buffer
The business should not aim to arrive at Christmas with exactly enough cash to cover December.
January still follows.
Employees return.
Payroll continues.
Suppliers need paying.
Stock may need replacing.
Rent and finance repayments continue.
Tax obligations remain.
Some December debtors may still be outstanding.
A business that uses nearly all available cash preparing for the end of the year may begin January with limited flexibility.
The cashflow forecast should extend until normal receipts and trading patterns are expected to return.
Planning on 23 September is about preserving options
This is still early enough for businesses to change course.
Stock orders may be adjusted.
Supplier terms can be discussed.
Customer deposits may be negotiated.
Equipment purchases can be structured differently.
Overdue debtors can be followed up.
Existing facilities can be reviewed.
Additional finance can be investigated if it is genuinely required.
The purpose is not to encourage businesses to borrow months before they need money.
It is to avoid making today’s commitments without understanding what they leave behind.
What information can help with a working capital review?
Depending on the business and finance being considered, useful information may include:
recent business bank statements
financial statements or management accounts
debtor ledger
creditor ledger
current cash reserves
existing overdraft or facility limits
upcoming stock orders
supplier payment terms
payroll
tax obligations
customer payment history
existing finance repayments
expected October to January trading
amount potentially required
intended use of funds
The aim is to identify the lowest likely cash point and what creates it.
Five questions Moorabbin businesses may ask while planning ahead
How much cash should a business keep as a working capital buffer?
There is no single amount that suits every business. The appropriate buffer depends on payroll, supplier commitments, customer payment timing, fixed costs, existing facilities and the potential for unexpected expenses.
Should we use our cash to increase stock before Christmas?
That depends on the stock requirement, expected turnover and how much liquidity remains afterwards. The effect on payroll, tax, suppliers and January cashflow should be considered before committing the funds.
Can finance help us preserve cash rather than waiting until we run short?
Potentially. Depending on the requirement, options such as trade finance, debtor finance, asset finance or other working capital facilities may be considered. Lender requirements vary.
What if most of our cash is tied up in customer invoices?
For eligible B2B businesses, debtor or invoice finance may be worth investigating where qualifying commercial invoices are awaiting payment.
Is 23 September too early to decide how much cash we need for Christmas?
No. This is still the planning stage. If stock, supplier, payroll or equipment decisions are likely to be made over the coming weeks, estimating the cash buffer now can help the business avoid overcommitting later.
Do not measure affordability by whether you can make the payment today
For established businesses in Moorabbin VIC, a strong balance today does not automatically mean every available dollar should be committed to the final quarter.
Thrive Broking can help Moorabbin businesses review expected stock, debtor, supplier and operating cashflow and compare working capital, trade finance, debtor finance, asset finance and other commercial funding options across our lender panel where appropriate.
On 23 September, this remains preparation.
The goal is not simply to work out whether the business can pay for the next opportunity.
It is to understand how much cash will remain afterwards and whether that is enough to keep the rest of the business operating comfortably.
A Broker’s Observation
One of the simplest questions I would ask before a business commits a large amount of cash is:
What is left after you do it?
Not what is left on the same afternoon.
What is left after the next payroll, supplier account, tax payment and finance repayment while you wait for the next major customer receipt?
A business can absolutely afford a $150,000 purchase and still decide that using $150,000 of its own cash is not the structure it wants.
Sometimes the most important part of Christmas cashflow planning is not finding money to spend.
It is protecting enough working capital so the business still has choices afterwards.