Let’s Talk: Your guide to healthy cash flow in a downturn

Join us this week on Let’s Talk, where we present to you the views of industry leaders regarding the matters most affecting your business. This week, our leaders discuss: How do you keep cash flow in goodhealth during slow business?

Whether you are facing a seasonal slumpor a surprise slowdown, maintaining a steady cash flow is crucial tosurvival and growth. Let’s dive deep into the strategies and tips our panel has to offer.

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Suzanne Westney, Director at McGrathNicol

“A slowdown in business can create cash flow pressures, and it is important that management understand the impact by preparing an accurate cash flow forecast. Any shortfall can be mitigated by optimising working capital processes, including collecting outstanding invoices faster, tightening inventory management, and negotiating improved terms with customers and suppliers.

“Variable costs and non-essential spend should be reviewed and reduced where possible. This may include reducing temporary or contract staff, minimising discretionary expenditure, or reassessing investment priorities. If the slowdown is permanent, the fixed cost base should also be reduced to ensure longer-term business viability,”

Jo Burston, Founder and CEO, Inspiring Rare Birds

“For Australian small businesses, managing cash flow is crucial during slow economic periods or seasonal downturns. Here are five practical strategies tailored specifically for the local context to keep your finances stable:

1. Efficient Invoicing: Invoice promptly and clearly, using accounting software tailored for Australian businesses like Xero or MYOB. Encourage faster payments by offering small discounts for early settlements and clearly state your payment terms.
2. Negotiate Expenses: Actively engage with suppliers, landlords, and utilities providers to renegotiate terms. Australian small businesses often succeed in securing flexible payment arrangements or reduced rates by maintaining open communication.
3. Trim Unnecessary Costs: Regularly review your budget and eliminate non-essential expenditures. Consider temporary suspension of subscriptions or reducing discretionary spending until cash flow improves.
4. Expand Revenue Opportunities: Explore diversifying your product or service offerings to match local market needs. Participating in local business networks or online Australian marketplaces can uncover new revenue streams.
5. Utilise Financial Support: Take advantage of government grants, incentives, or small business loans specifically offered by Australian banks or government programs to assist during challenging periods.

“Implementing these strategies proactively can significantly enhance your business’s resilience and position you strongly for recovery and future growth.”

Kyle Willersdorf, Acting General Manager, Australia and New Zealand at GoCardless

“When business slows, keeping cash flow healthy becomes even more important. With less coming in, businesses need to ensure whatever is owed is coming in on time. Late payments can cripple businesses when things get slow. According to our Pursuing Payments Report, nearly one in three estimate they lose up to $6,000 a year because of it, while one in ten say the figure is even higher, between $12,000 and $30,000. That’s capital that could be used to hire, market or simply stay afloat.

“To avoid a cashflow emergency when revenue is low, curb late payments. Start by setting clear payment terms so customers know exactly when and how to pay. Then make it easy for customers to stick to those terms. Bank pay methods like Direct Debit take the guesswork out by collecting payments automatically on the due date – no chasing or awkward conversations necessary. This puts you back in control with fewer missed payments, less admin and more predictability.

“With rising costs, global uncertainty and an election on the horizon, take advantage of tools that make life easier- especially when income is unpredictable. Reducing friction at payment time helps protect your cash flow and gives you space to focus on what really matters – running and growing your business.”

Lynn Jensz, Managing Partner, Accounting and Business Advisory, FINDEX

“For many businesses, the first time a cash flow forecast is developed is at the very beginning of the business journey when the bank requests it. More often than not, it’s then tossed in a drawer and forgotten about until a business experiences a slowdown.

“Business is seasonal and budgets and cash flow forecasts are an important tool that should be considered as part of business management. Working alongside financial advisors provides regular checkpoints to analyse industry trends to best identify, early on, when there will be peaks and troughs and plan for adequate cash reserves.

“Taking active steps like reducing expenses, managing debtors and streamlining inventory turnover is also important for ensuring healthy cash flow. Evaluating outstanding debts and being proactive in following up accounts receivable can help free up revenue. Findex has a credit consulting arm which provides debt management advice and support.

“Inventory often gets overlooked when considering cash flow. When forecasts indicate an industry downturn, quick turnover of inventory can free up resources which is integral, and businesses should consult their financial advisors for ways to diversify revenue streams.

“For Australian SMBs looking to future proof their business in an uncertain economic climate, leverage financial forecasts and tools as well as seek advice to fortify your financial position.”

Carl Warwick, Regional Sales Director Asia Pacific and Japan, BillingPlatform

“When business slows down, maintaining a healthy cash flow is essential for stability and long-term growth. Here are key strategies to stay financially resilient:

• Adapt Billing & Pricing: Adjust pricing structures, introduce usage-based models, or offer flexible payment terms to maintain steady revenue while keeping customers engaged.
• Streamline Payments: Late payments can put pressure on cash flow. Automating invoicing, offering multiple payment options, and enabling direct debit can help accelerate collections and reduce delays.
• Gain Financial Visibility: Real-time reporting and analytics provide insights into revenue trends, outstanding invoices, and potential risks, helping businesses make informed decisions and adjust strategies proactively.
• Ensure Accurate Revenue Recognition: Proper tracking and recognition of revenue—even for complex contracts—support compliance and provide cash flow predictability.

“By focusing on automation, flexibility, and financial insight, businesses can navigate slower periods with confidence, protect cash flow, and stay on track for long-term success.”

Amber Daines, Founder of Bespoke Co. and ESG4PR

“Keeping cash flow healthy during slow periods is a challenge for small PR agencies like us. A few of our core tactics to keep us going since 2007:

1. Diversify Your Revenue Streams
   • Offer Retainers: Secure long-term contracts with clients instead of project-based work.
   • Expand Services: We offer media training, internal content creation, or crisis communication as part of a retainer.
   • Digital Products: Create online courses, templates, or guides for DIY PR that are affordable and evergreen.
2. Leverage Existing & Past Clients
   • Upsell and Cross-Sell: Offer additional services to existing clients like CEO speech writing or targeted media lists.
   • Loyalty Discounts: Provide incentives for clients who commit to longer contracts.
   • VIP days: We offer “done for you” PR days which are $5K and tailor their PR plan.
3. We Build our Database During Busy Periods
   • Always Be Prospecting: We use LinkedIn to set up meetings and keep networking and pitching for future projects.
   • Maintain a Marketing Presence: Keep your agency visible through content marketing, social media, and thought leadership. We do our own PR!
   • Develop Strategic Partnerships: Collaboration with adjacent entities like government agencies who have tenders or startups who need new comms support.”

Gus Gilkeson, CEO at Grow Capital

“If a business finds cash flow has slowed, there are some immediate steps that can be taken to help get you through.

• Examine Expenses: What is surplus to the business? Can you reduce licensed seats for software in the short term, or lease equipment/vehicles/assets from within your network rather than make a capital-heavy purchase for example.
• Marketing Budget: Maintain or even increase marketing spend to keep business coming in. Consider asking for a discount or longer payment terms if you increase your spend.
• Push Out Payments: Can some annual payments be paid in instalments, or pushed back? While this might attract a nominal fee, it might be worth it to free up cash flow in the short term.
• Understand Your Cash Flow: Run an analysis of your cashflow and examine each line item to maximise incomings and minimise outgoings.
• Changed Payment Terms: Can you offer clients a small discount to pay invoices sooner/upfront?
• Finance Options: Once you have a greater understanding of your cashflow needs, do you need to consider a line of credit or overdraft to provide flexibility in the future?”

Alex Molloy, Co-founder and CEO, Valiant Finance

“We know that public holidays often result in delayed payments and gaps in cash flow for small businesses and sole traders. And for some, the cooler weather can also mean a slowdown in business.

“That’s why we’ve put together a quick checklist to help you prepare in advance for changes to day-to-day sales and operations.

“Forecasting:

• Project your expected income and expenses for the months ahead, factoring in the reduced number of working days due to Easter and Anzac Day for example, and upcoming gaps in cash flow.
• Develop a contingency plan to address additional expenses or payment disruptions. Hint: getting preapproval for a merchant cash advance or setting up a line of credit can be the safety net you need in a pinch.

“Operations:

• Plan for adjusted staffing, stock and equipment demands (depending on anticipated increases or decreases in customer activity)
• Chase up any outstanding invoices and issue any new invoices promptly to minimise delays in receiving payments
• Communicate changes to operating hours in advance, ensuring you’ve updated online business listings

“At Valiant Finance, we believe preparation is power in turn, giving you the financial confidence to navigate seasonal shifts and holiday disruptions.”

Michael Fingland, CEO of Vantage Performance

“Keeping cash flow healthy during slow periods requires a combination of careful planning, cost control, and revenue-boosting strategies.

“With CommBank data showing that four out of five small to medium businesses are facing cash flow stress, understanding the nuances of cashflow is crucial to surviving hard times and boosting future growth.

“Stay financially resilient when cash flow slows with the following tips:

1. Maintain your cash flow forecast – Creating a 13-week forecast, the same length as a typical cash cycle, helps predict challenges and proactively manage expenses.
2. Understand your resources – A healthy business climate positively impacts banks, consumers and the overall economy, so take advantage of available resources. These include Government grants, ATO payment plans, invoice financing and low-interest loans.
3. Communicate with your financier – Maintaining trust and open lines of communication with your financial team in tough times is essential avoiding and navigating unforeseen cash flow issues.
4. Review current operations – Slow periods are a good time to review customer lists and product lines, which can bloat over time. Ranking items by revenue or profitability helps determine future business priorities and pricing. Now is also the time to consider a promotion or deal to shift excess inventory.”

Edward Alder, CEO and Co-Founder at pay.com.au

“Nearly 80% of SMBs have experienced cash flow challenges over the last year, with declining revenue being the leading cause. Economic uncertainty, seasonal fluctuations, and rising operating costs significantly impact business performance, making proactive cash flow management essential for business owners.

“When revenue slows, cutting back on non-essential costs helps maintain stability and preserve cash flow. Reviewing software subscriptions, renegotiating supplier contracts, and taking advantage of government grants or tax incentives available to SMBs can make a big difference.

“Partnering with the right payment providers can also help businesses stretch their money further. By using financial tools that offer clearer visibility into transactions, businesses can better anticipate shortfalls and make informed decisions. Working with providers that help unlock the full potential of your credit card can also change the game. They enable payments to suppliers who typically wouldn’t accept credit cards, giving you extra cash flow days compared to payments you would have made via bank transfer. Earning rewards on transactions can also help reduce costs through strategic point redemption, turning everyday spend into financial benefits.

“By trimming unnecessary expenses and leveraging innovative payment solutions, Aussie businesses can stay resilient through slow periods and emerge stronger in the long run.”

Peter Curran, Founder & Business Development Manager, Digital Surfer

“Every business will find themselves in a position where business slows down, even a little. It’s actually the perfect time to realign your marketing and ensure what you’re investing into is actually benefiting you, as that downturn may be a result of an ineffective strategy or two.

“What we always recommend to businesses who come to us during a slow period is to look at the data (or we do it for them). Where are your leads actually coming from? And don’t just guess. Really find out, using advanced tracking analytics. There’s many times we’ll be approached by a business who is pumping a few grand into Google Ads or SEO, but they are targeting low-volume terms or the wrong intent so the views they do get aren’t actually leading to anything meaningful.

“A slow patch is also when you want to get loud with your marketing. Your competitors are likely also experiencing a dip, and many will make the mistake of pulling back on marketing (even free avenues like social media) when that’s what brings in the business. So, it’s the best time to drive that thought leadership, get those PR features, and ask for those testimonials, produce case studies and publish some walk-throughs of your product or service to get yourself out there.”

Steven Nicholson, Founder, GearChange Business Advisory

“Slowdowns are a normal part of the business cycle, whether seasonal, driven by macro-economic factors, or by new competition. Follow these tips to keep your cash flow healthy and your business on track:

• Maintain a cash buffer of up to three months of operating expenses. This will buffer you from short-term headwinds.
• Always have a hit list of expenses that can be cut immediately with little impact on business performance. It is time to remove the ‘nice to have’ and retain the ‘must have’.
• Optimise your working capital by pulling these levers:
  • Reduce cash tied up in debtors by not giving more credit than you must and chasing outstanding amounts owed. Send reminders and statements to all customers.
  • Reduce cash tied up in inventory by only carrying what you must. Maybe buying more frequently is better than buying in bulk? For services businesses, reduce WIP by billing in stages and quickly at the end of each job.
  • Extend your purchasing cash cycle by negotiating better credit terms with suppliers and only paying when invoices become due.

“Healthy cash flow equals healthy business. Act now on these suggestions before you have a  business slowdown.”

Graeme Clemett, General Manager, The Audacious Agency

“Managing a business slowdown requires a cool head and a ruthless focus on cash flow. The first step is to become cut-throat about what you cut out. Identify the absolute essentials needed to keep the business operational and eliminate any “nice-to-haves”.

“In most cases, 80% of your sales come from 20% of your products or services. Double down on these high-performing areas, temporarily pausing or divesting parts of the business that aren’t generating immediate returns.

“Supplier relationships are the lifeblood of your business, and maintaining open communication is key. Even if it means setting up payment plans, make every effort to honour your commitments. Suppliers who feel valued and informed are more likely to support you through challenging times.

“Building a cash buffer is essential for long-term resilience and having funds available for those inevitable rainy days provides the flexibility to weather unexpected storms.

“Someone within your business should be monitoring forecasted and actual cash flow daily, weekly, and monthly. This provides early warning signs of potential issues and allows you to be proactive.

“A general guideline, particularly for professional services or consultancies, is the 3rd/3rd/3rd model: one-third of income allocated to operating costs, one-third to supplier costs, and one-third is profit. This provides a sustainable framework for financial stability.”

Kim Heras, CEO, Evenly

“Navigating a business slowdown means keeping a close eye on cash flow.

“Xero reports that over 50% of SMEs are regularly paid late, so getting paid on time when cashflow is tight becomes even more important, whether you’re bringing on new clients or managing existing ones.

“Tools like Bizly offer free, quick risk assessments of any Australian business.

“For a deeper dive, tools like PayPredict, that connect to your accounting platform, provide more detailed payment and revenue forecasts.

“As the Australian Treasury report notes, “late payments can lead to cash flow problems, stress, and even business closure.” So, maintaining steady cash flow is vital.

“Here’s a practical approach:

• Assess Client Risk: Use tools e.g. Bizly to check if there are any issues you should be aware of with new or existing customers.
• Forecast Payments: Use tools e.g. PayPredict to get a clear view of incoming cash to make informed decisions.
• Monitor Cash Flow: Regularly track your finances to spot potential issues.
• Proactive Payments: Be proactive by introducing processes like upcoming payment reminders.

“Proactive cash flow management is key to weathering any slowdown. With a few simple tools and processes you can significantly decrease your risk or late or non-payment.”

Alexander Laureti, Managing Director, LMS Advisory Pty Ltd

“Uncertain times require smart, fast financial decisions. Whether it’s global instability, elections or cost living pressure, managing your business cash flow is key to survival. Here’s how to sharpen your focus and prosper:

• Get Money In, Faster
  • Invoice as soon as work is done—don’t delay.
  • Set clear payment terms—7-day or COD if possible.
  • Offer multiple payment methods to remove friction.
  • Use automatic reminders—be the squeaky wheel that gets paid.
  • Raise prices or run short-term promos to generate quick revenue.
  • Focus on your best-paying clients—don’t waste energy on chronic late-payers.
  • Make deals with overdue accounts that could go bad. Some is better than none.
• Spend Smarter
  • Review budgets—cut anything that doesn’t deliver ROI.
  • Prioritise payroll, tax, statutory and critical suppliers with a cash reserve account.
  • Talk to creditors—negotiate longer terms if needed.
  • Get overdrafts or credit cards, use with discipline.

“Don’t try to serve everyone. Focus your energy on clients who value your work and pay reliably. Structure your business around them, and you’ll not only survive tough times—you’ll come out stronger.”

Elise Balsillie, Head of Thryv Australia

“When business slows down, managing cash flow becomes less about slashing costs and more about sharpening your strategy. See it as an opportunity to reimagine how your business creates value beyond the transaction.

“The most resilient businesses use quieter periods to strengthen relationships, refine internal systems and invest in customer loyalty. It’s also a time to innovate, not always with new products or services, but through smarter processes, clearer communication and more meaningful engagement. These shifts don’t just stabilise cash flow, they position your business to accelerate when demand returns.

“This is where SaaS platforms can play a pivotal role. The right solutions bring structure, speed and visibility across operations, helping businesses stay agile and informed. From automating everyday tasks to capturing richer customer insights, SaaS enables consistency, which is essential for healthy cash flow. It frees up time and headspace for business owners to focus on strategy, not admin.

“Consistency is your greatest asset. The more streamlined and insight-driven your operations, the more confident and controlled your financial position becomes. Too often, businesses wait for momentum to pick up. The smarter ones create it.

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