What You’ll Learn:
- Why December is the right moment to review cash flow
- How to identify seasonal patterns in your business
- What expenses and obligations to evaluate before 2026 begins
- Practical steps to strengthen your first-quarter financial outlook
A practical look at your cash flow as the year winds down
As the year wraps up in Tacoma and the broader South Sound region, many small business owners are thinking about how their cash flow held up over the past twelve months. December offers a clear vantage point—you can look back at the whole year, spot patterns that shaped your operations, and make informed decisions about the months ahead. A little attention now helps you understand where your cash is going and what adjustments could support a stronger start to 2026.
Why this review matters right now
Cash flow issues rarely appear out of nowhere. They tend to build slowly through busy seasons, slower months, unexpected expenses, or changes in customer activity.
By reviewing your year-end numbers, you create a more accurate picture of how your business actually runs, not how you assume it runs.
This clarity supports smarter planning for Q1, when early-year expenses and taxes can put pressure on your cash reserves. A careful review now helps you enter the new year prepared for both opportunities and obligations.
5 Steps to strengthen your cash flow planning
- Review cash inflows and outflows month by month
Look at your cash flow statements for each month of 2025. Identify periods where cash came in steadily and times when it tightened.
Many Tacoma businesses see seasonal shifts—tourism patterns, weather changes, or industry-specific cycles all influence cash flow. Understanding these rhythms helps you anticipate similar fluctuations in the year ahead.
- Identify your largest expenses and upcoming obligations
Take note of recurring expenses, annual subscriptions, insurance renewals, and tax payments that will hit in the first quarter.
Mapping these out now gives you time to plan for them rather than scrambling once January arrives. This step is especially helpful for businesses with significant equipment needs or irregular vendor schedules.
- Evaluate accounts receivable and outstanding invoices
If customers or clients still have unpaid invoices from earlier in the year, follow up before the holidays. Collecting outstanding payments strengthens your year-end cash position and gives you a clearer picture of available funds for early 2026. It also helps you determine whether your invoicing process needs attention in the new year.
- Look for expenses that can be adjusted
As you review your spending, you may find subscriptions you no longer use, vendor agreements that need renegotiation, or processes that could be streamlined. Even small adjustments can make a noticeable difference in your cash flow over time.
Making these changes in December sets you up for more predictable financial management in the new year.
- Forecast your first-quarter cash needs
Use what you learned from your year-end review to build a realistic picture of the first quarter. Consider expected revenue, unavoidable expenses, and any planned investments for early 2026. A simple forecast helps you prepare for slower months, see what’s achievable, and position your business on solid footing.
Setting up a stronger financial start to 2026
Taking a closer look at your cash flow now helps you navigate the start of the year with more clarity and fewer surprises. With your year-end numbers reviewed and a plan that reflects your business’s real patterns, you can move into 2026 with confidence. If you’d like support reviewing your cash flow or planning for the first quarter, J. Ott Business Solutions is here to help you map out the next steps. Reach out today for a confidential consultation.