Quick answer
Before borrowing, most New Zealand businesses can release cash from inside: invoice the day work finishes, follow up debtors promptly, ask for deposits, clear slow stock, sell idle assets, cancel unused subscriptions, review pricing, pay ACC levies by instalment where offered, choose a GST basis and filing frequency that suits your cash cycle, and agree tax arrangements early. Each step shrinks the gap a lender has to fill.
Key points
- Internal cash is the first piece in any funding stack — no lender, no repayments.
- Debtors and stock are where most trapped cash hides.
- business.govt.nz says the biggest collection mistake is waiting too long to contact debtors.
- Small recurring savings add up to real funding over a year.
- Measure what you free up so the remaining gap is accurate.
Every funding stack on this site starts in the same place: money that’s already inside your business but isn’t working. Unpaid invoices, stock on the shelf that isn’t moving, a spare ute in the yard, a software subscription nobody logs into, prices that haven’t kept up with costs. None of it needs a lender, and none of it needs repaying. Freeing it up first means any external piece — supplier terms, deposits, a loan — only has to fill a smaller gap.
Here’s a practical playbook. Work through it with your last three months of bank statements and your debtor and stock reports open.
1. Invoice the moment the work is done
business.govt.nz recommends sending invoices immediately after completing work, while the value is still fresh in the customer’s mind. Every day an invoice sits in drafts is a day added to your cash cycle. If you invoice weekly or monthly in batches, switching to same-day invoicing can bring cash forward by days or weeks across your whole ledger.
Quick win: set a rule that every job is invoiced before the end of the day it finishes.
2. Follow up debtors on a schedule
business.govt.nz identifies the most critical collection mistake as waiting too long before getting in touch with debtors. It suggests an email reminder two business days after the due date and a phone call if there’s no response after a week, plus keeping a record of who owes what and how overdue each amount is.
Quick win: run an aged debtors report today, and call every account more than 30 days overdue this week.
3. Make payment easy and terms clear
Clear invoices showing what was supplied, when, the amount, the due date and the payment terms reduce disputes. business.govt.nz also suggests offering flexible payment methods. A payment link on every invoice removes one more excuse to pay later.
4. Ask for deposits and progress payments
For custom work, projects, events and bookings, a deposit funds part of the job before you start. On longer jobs, business.govt.nz suggests splitting the total invoice into smaller payments to improve cash flow. See customer deposits as funding — and remember a deposit received under a contract can trigger GST when received.
5. Clear slow-moving stock
Stock that hasn’t sold in months is cash on a shelf. Return what you can to suppliers for credit, bundle slow lines with fast ones, or sell at cost to make room for stock that turns. The cash released can fund the next order directly. The stock remix shows how this fits with supplier terms.
6. Sell or refinance idle assets
Vehicles, machinery and equipment that haven’t earned anything in a year cost money to insure, register and store. Selling them releases cash with no repayments; refinancing releases cash while you keep them. Check the GST and depreciation effects first — the guide on selling business assets: GST and tax explains how much you’ll really keep. See also selling idle assets.
7. Cancel or downgrade subscriptions
Software seats for staff who’ve left, duplicate tools, premium tiers you don’t use, memberships, storage units. Individually small, together they can add up to a meaningful monthly saving.
Quick win: export three months of card and bank transactions and highlight every recurring charge. Cancel anything nobody can justify in one sentence.
8. Review your pricing
If your costs have risen — wages, materials, insurance, rent — and your prices haven’t, the business is quietly funding the gap. A pricing review is often the single biggest cash lever available. Even a modest increase across steady volumes can release more cash each month than a small facility would, without any repayment.
Illustrative only: a trades business invoicing $90,000 a month that lifts prices by 4% on most work adds roughly $3,600 a month, or over $40,000 a year, before any change in volume.
9. Smooth your tax and levy timing
Tax doesn’t go away, but its timing can be made friendlier:
- GST basis and frequency. Inland Revenue allows the payments basis for businesses with sales of $2 million or less in the last 12 months, and two-monthly or monthly filing for most businesses. The right combination can align GST payments with when cash actually arrives.
- Provisional tax options. The ratio and AIM options can match provisional tax to your cash flow; see the GST and provisional tax remix.
- ACC levies. business.govt.nz notes ACC levy invoices can be paid by direct debit in instalments rather than as one lump.
- Talk to Inland Revenue early if a bill will be hard to pay. A formal instalment arrangement reduces penalties compared with paying late without one.
10. Separate the GST and PAYE money
This one doesn’t create cash, but it stops you spending money that isn’t yours. Move GST collected and PAYE deducted into a separate account as they arise. A business that uses GST as working capital will always face a funding crunch on the 28th.
11. Tighten your own terms of trade
Your terms of trade set the rules every customer plays by. If they’re vague or out of date, cash suffers quietly. Review:
- Payment terms. If most customers pay on the 20th of the following month but your terms say “net 7”, either enforce them or reset them to something you’ll actually follow up.
- Credit limits. Set a limit for each account customer, and pause new work when an account is over limit or overdue.
- New-customer checks. A quick look at a new business customer’s history before giving credit avoids bad debts later.
- Late-payment clauses. Clear terms about what happens when invoices are overdue give you a firmer footing when you follow up.
A lawyer or your industry association can help with wording. The point is consistency: terms you apply to everyone are easier to enforce than ones you negotiate case by case.
12. Look at your own payment timing
Paying suppliers early, unless there’s a discount worth taking, hands them your cash for free. Pay on the agreed due date — not before, and never after. Line up large supplier payments so they fall after your main customer receipts rather than before. It doesn’t change what you owe; it changes how long the cash stays in your account.
How do you measure what you’ve freed up?
Keep a simple tally over four to eight weeks:
| Lever | Cash released | One-off or recurring |
|---|---|---|
| Overdue debtors collected | One-off | |
| Faster invoicing (days saved × daily sales) | Ongoing timing gain | |
| Deposits on new work | Ongoing | |
| Stock cleared | One-off | |
| Assets sold (net of GST and tax) | One-off | |
| Subscriptions cancelled | Recurring monthly | |
| Price review | Recurring monthly |
Then update your forecast. business.govt.nz describes a cash flow forecast as an estimate of how much money is coming in and going out of your business for a given future period — and the levers above change both sides. The page on sizing your funding gap shows how to find the new low point. If a gap remains after all twelve levers, that’s the honest number to fund; a real person can look at that remaining piece with you.
When does squeezing go too far?
Internal cash is cheap, but not free of consequences:
- Chasing too hard can damage good customer relationships. Firm and polite beats aggressive.
- Clearing too much stock can leave you short of the lines that sell.
- Selling assets you’ll need can cost more to replace later.
- Stretching suppliers beyond agreed terms is borrowing without permission — and it’s how accounts get put on stop.
- Cutting the owner’s pay to zero isn’t sustainable and worries lenders.
The aim is to release cash that’s genuinely trapped, not to starve the business.
Where does internal cash sit in the stack?
First. In ordering your funding sources, internal cash comes before owner contributions, supplier terms and deposits, and well before any loan. For businesses with business customers on 20th-of-the-month or 30-day terms, once collections are tight, invoice funding can turn the remaining debtor days into cash.
Ready to fund the gap that’s genuinely left?
When you’ve worked through the playbook, the gap left is real, measured and usually smaller. If it still needs funding, tell us about the goal and the remaining gap. Starting an enquiry doesn’t trigger a credit check, a real person — not a list of lenders — works on it, and we’ll talk through which piece fits. Please share accurate figures on the form, including what you’ve already freed up; it helps us size the right piece first time.
Frequently asked questions
How can I improve my business cash flow quickly?
Invoice immediately when work is done, chase overdue invoices promptly, ask for deposits on new work, sell slow stock and idle assets, and cut subscriptions you don't use. These steps can release cash within weeks.
How do I get customers to pay faster?
business.govt.nz suggests sending invoices straight after the work, stating clear due dates and payment terms, offering flexible payment methods, and following up with an email two business days after the due date and a phone call if there's no response after a week.
Can I pay ACC levies in instalments?
business.govt.nz notes ACC levy invoices can be paid by direct debit, as a one-off payment or in instalments, which can spread the cost across the year.
Should I raise my prices to fix cash flow?
If your costs have risen and your prices haven't, a review is often overdue. Even a small price increase on steady volumes can release more cash each month than a loan would provide, without repayments.
When should I stop squeezing and borrow instead?
When the remaining gap is genuinely beyond what internal levers can release in time, or when squeezing further would damage customer or supplier relationships. At that point, a well-sized facility is the right piece.