Your Best Month Could Be Your Worst for Cash

A record sales month can leave you with less cash than a quiet one.

Why it matters. Growth feels like safety, but cash leaves before it comes back. You pay staff, suppliers and stock up front, and the customer pays weeks later. CommBank puts it plainly: you can be making sales and showing a profit on paper, but if cash is tied up in unpaid invoices or stock, you might struggle to pay bills.

Why this matters right now

The gap is widening. CreditorWatch's September Business Risk Index found just 48% of invoices were paid by their due date, down from 58% a year earlier, and one in 10 invoices was more than 60 days overdue. Its chief executive called payment delays "often the first indicator of emerging financial stress".

When customers pay later, every extra sale ties up more of your cash for longer. Late payers barely hurt a quiet business. They hurt a growing one, because the bigger the month, the more cash is still waiting at the door.

How a good month eats cash

A quick illustration, with made-up numbers. An example SME usually bills $100,000 a month. October is a record: $150,000. To deliver it, the business spends an extra $35,000 on wages, materials and stock during October. Customers pay in 45 days, so the extra sales land in mid-December.

For six weeks, $35,000 more has gone out and nothing extra has come in, right before Christmas wages and the next BAS. The profit and loss shows a great month. The bank account shows the opposite.

Notice the business did nothing wrong. It won the work, delivered it and invoiced on time. The problem is timing, and timing is exactly what a once-a-year look at the numbers misses.

None of that shows up in the annual accounts. All of it shows up in numbers you already have, if you look at them every month.

Here's how I see it: profit tells you whether growth is worth having. Cash tells you whether you'll get there.

Three early warnings, months ahead

1. Warning one: debtors are growing faster than sales, so customers are funding less of your growth.
2. Warning two: stock or work in progress is climbing ahead of orders, so cash is sitting on a shelf.
3. Warning three: you're paying suppliers later just to cover wages, which borrows from next month.
4. Check all three monthly from your aged debtors list, stock figure and creditors list.
5. Before you take a big job, work out how many weeks you'll fund it before the customer pays.
6. Ask for a deposit or milestone payments on large orders.
7. If two warnings appear together, talk to your accountant or bank before you need to.

Soft close

You don't need a complex forecast to catch this. You need to read the numbers you already hold every month, not once a year. Pick one evening a month, pull the three lists, and compare them with last month. To see what each day of debtors, stock and payables costs you in dollars, try CCC Days-to-Dollars. To see where your cash is tied up and how it moved, use Working Capital Composition & Bridge. More peer notes and tools at financesignal.ai.

General information, not financial, tax or accounting advice.

Sources: CommBank Brighter, How to optimise your business cash flow (published 9 January 2026), checked 15 October 2026 — https://www.commbank.com.au/brighter/small-business/optimise-business-cash-flow.html · CreditorWatch, Late Payments Hit an 8.5-Year High in September 2026 (Business Risk Index, published 14 October 2026), checked 15 October 2026 — https://creditorwatch.com.au/blog/late-payments-trade-defaults-september-2026