Struggling with cash flow? Here’s what NZ businesses can do now

Cash flow pressure can affect businesses of all sizes — including those that are profitable and growing. The key is to act early, improve visibility, and focus on the practical steps that create more control. 
 

Cash flow pressure is often gradual, not sudden 

For many businesses, cash flow issues do not emerge overnight. They build over time through a combination of slower debtor collections, higher costs, tighter margins, irregular revenue or working capital tied up in the wrong places. 

By the time pressure feels urgent, options can be more limited. That is why early action matters. 
 

“Cash flow pressure often starts quietly. The sooner business leaders can see what is changing, the more options they have to respond before the pressure becomes urgent.” – Justin Martin, National Advisory Leader

Common causes of cash flow pressure 

Cash flow challenges often stem from customers taking longer to pay, costs increasing faster than expected, stock or work in progress tying up capital, weak forecasting, debt servicing pressure, growth outpacing financial capacity, and limited visibility over short-term cash needs. 

Not every cash flow issue points to a failing business. In many cases, it reflects the need for better systems, stronger controls or a more realistic plan. 
 

“A cash flow challenge does not always mean a business is underperforming. It can also be a sign that growth, costs, working capital or payment timing need to be managed more deliberately.” – Justin Martin, National Advisory Leader

 

Practical steps businesses can take now 

Improve short-term cash flow forecasting. A rolling cash flow forecast can provide essential visibility over the weeks ahead. It helps leadership understand what cash is due in and out, when pressure points may occur, what decisions may be needed early, and where funding gaps or timing issues may emerge. 

Even a simple 13-week rolling forecast can significantly improve confidence and control. 
 

“A rolling cash flow forecast gives leaders a clearer view of what is coming next. That visibility can turn reactive decisions into planned, practical action.” – Justin Martin, National Advisory Leader

Focus on receivables and collections. One of the quickest ways to improve cash flow is to strengthen how cash is collected. 

This may involve issuing invoices sooner, reducing delays in approval or billing, tightening payment terms, following up overdue accounts earlier, reviewing customer credit risk, and escalating long-outstanding debt. 

Improving debtor discipline can have a direct and immediate effect on working capital. 

Review expenditure carefully. When cash is tight, broad cost-cutting can be tempting. But a more targeted approach is often more effective. Focus on what is essential, what can be deferred, what no longer delivers value, and where spending has grown without clear return. 

Look closely at working capital. Cash is often tied up in stock, projects, work in progress, or inefficient internal processes. Reviewing working capital can identify opportunities to release cash back into the business. 

Address structural issues if the problem keeps returning. If cash flow pressure is recurring, the issue may not be short term. Pricing, cost structure, customer mix, delivery model or growth assumptions may need to be reconsidered. 
 

Why acting early makes a difference 

Businesses that respond early tend to have more flexibility. They can review funding options, improve internal controls, strengthen planning and make more measured decisions. 

At BDO, our Advisory team works with businesses to understand the drivers of cash flow pressure, improve visibility, and identify practical steps to support stronger financial control and resilience. 
 

“Strong cash flow management is about more than getting through the next few weeks. It gives businesses the confidence and flexibility to make better decisions for the future.” – Justin Martin, National Advisory Leader

Good cash flow management is not only about reducing pressure today — it is about building a business that has more options tomorrow. 
 

Ready to talk about cash flow? 

If cash flow is becoming harder to manage, talk to BDO’s Advisory team about practical ways to improve control and clarity.