If your cash flow management feels harder in January, you’re not imagining it; it is a real seasonal squeeze, and it catches a lot of solid, well-run businesses off guard. Late payments are a big part of the problem. FreeAgent’s late payment research found that almost two-thirds of invoices (62.6%) were paid late over the past year, which means plenty of SMEs are doing the work, sending the invoice, and then waiting… and waiting… and waiting.
At the same time, trading conditions haven’t exactly been calm. The Office for National Statistics reported that in November 2025, only 13% of trading businesses saw turnover increase, while 28% reported a decrease compared to the previous month. So even when you’re busy, the money coming in can feel less predictable than it should. The good news is that there are practical things you can do in January to tighten the gaps and protect your working capital.
The key is getting visibility and control
Pull up your bank, your invoicing list, and your upcoming bills. Write down three simple numbers: what’s due over the next 14-30 days, what must go out, and which dates your account could dip uncomfortably low. Cash flow issues are often timing issues, and once you can see the pinch points, they’re easier to fix.
Look at invoices already sent and likely to be paid. Mark what’s overdue, what’s due this week, and what’s due later. Don’t count “they said they’d pay” money unless there’s a date attached to it.
This is usually the fastest win. Ask for a confirmed payment date rather than a vague nudge. Remember, you’re collecting money you’ve already earned.
Invoice as soon as work is delivered, and in stages if you can. Ensure you’ve made paying easy (payment links, clear bank details, no confusing wording).
Check what’s due in the next couple of weeks and speak to suppliers early if it’s going to leave things tight. Many will agree to split payments or extend terms slightly if you’re proactive. That breathing room can protect your working capital instantly.
Trim non-essential spend for January, but don’t panic-slash the things that keep revenue coming in, such as marketing activity, stock, or operational costs that directly support delivery. Avoid shrinking your business to survive the month.
Pick 3 actions you’ll do in the next 7 days (for example: chase X overdue invoices, invoice same-day, negotiate one supplier payment).
A lot of business owners hear “finance” and instantly think it means things have gone wrong. In reality, more SMEs now use short-term funding as a planning tool, especially during high-pressure months like January.
Used properly, small business finance can smooth timing gaps and protect your working capital –helping you avoid the worst-case scenario of slowing down purely because cash hasn’t landed yet.
That might look like using short-term loans to cover a VAT payment, fund stock ahead of a busy period, bridge a gap caused by late-paying customers, or spread a one-off cost over manageable monthly payments.
And for some businesses, a small business financing loan can be a sensible option when you have a strong trading performance, but cash flow timing is letting you down.
The key is making sure the funding matches the problem you’re solving, and that repayments are realistic and structured around your cash coming in.
If January feels like a constant juggling act, it doesn’t mean your business is failing; it usually means you’re operating realistically: customers pay late, and cash sometimes doesn’t arrive neatly.
Phoenix Commercial Finance helps UK businesses improve cash flow, protect working capital, and explore funding options; whether that’s a short-term solution, support for growth, or simply making the month less stressful.
If you want to sense-check your options, Phoenix Commercial Finance can help you explore funding routes that genuinely fit; whether it’s working capital support, short-term finance, or a more structured plan for the year ahead.
Talk to our team on WhatsApp for a quick, no-pressure chat or complete our no-obligation enquiry form, and we’ll come back to you with clear next steps.
