A business can be profitable on paper and still struggle to pay its bills. When customers take longer to settle invoices, operating costs increase and borrowing becomes more expensive, the gap between earning revenue and receiving cash becomes increasingly important.
The South African Reserve Bank increased its policy rate by 25 basis points, or 0.25 percentage points, to 7.25%, effective 25 September 2026. Its September statement also highlighted pressure from rising fuel prices and a weaker growth outlook. These developments provide a timely reason for business owners to revisit cash-flow forecasts, borrowing arrangements and spending plans. Read the SARB’s September statement.
The impact will differ from one business to another. Companies with variable-rate debt, substantial transport costs or long customer payment cycles should assess their exposure carefully.
At HLB CMA SA Inc., we encourage businesses to strengthen their financial planning through five practical steps.
1. Build a clear picture of the next 13 weeks
Start with a rolling cash-flow forecast that shows expected receipts and payments each week. Include salaries, supplier payments, loan repayments, rent and tax obligations, together with any significant once-off expenditure.
Use realistic collection dates. An invoice due next week may arrive considerably later if the customer has a history of delayed payments.
Update the forecast weekly and compare actual results with expectations. This helps management identify when cash may run short and how much funding could be required.
Also prepare a more cautious scenario: what would happen if a major customer paid 30 days late, sales slowed or an important supplier increased prices? Understanding these pressures early creates time to respond.
2. Understand how borrowing costs affect your business
Review each loan and overdraft facility, including its interest rate, repayment schedule, security requirements and financial conditions.
The SARB’s policy rate is not the rate every business pays. The effect on your facilities depends on their contractual terms, whether rates are fixed or variable, and how your lender applies changes.
For illustration, if the interest rate on a constant R5 million outstanding balance increases by 0.25 percentage points, the additional simple interest would be approximately R12,500 over a full year. Actual costs will depend on repayments, daily balances, compounding and the timing of the adjustment.
Update your forecast using confirmed lender rates. If repayment pressure is emerging, engage your lender early and compare the total costs of available options, including fees and any longer repayment period.
3. Turn outstanding invoices into cash sooner
Review your debtors’ age analysis and prioritise overdue balances, particularly large amounts and accounts showing a pattern of late payment.
Effective collection starts with accurate invoices, clear payment terms and prompt follow-up. Confirm that customers have received invoices and that purchase orders, delivery records or other required documents are complete. Resolve disputes quickly so administrative issues do not delay payment.
Where commercially appropriate, consider deposits, milestone billing or revised credit limits for new work.
Early-payment discounts deserve careful calculation: they may improve cash flow, but they also reduce the margin earned on the sale. Assign responsibility for collections and track progress each week.
4. Check whether your margins still support your costs
Higher revenue does not necessarily mean stronger profitability. Review margins by product, service or project to identify where increased costs are absorbing earnings.
Include direct costs such as materials and transport, alongside staff time and other resources required to deliver the work.
Before adjusting prices, examine supplier terms, purchasing practices, waste and operational efficiency. Where price changes are necessary, consider customer contracts, competitive conditions and the value your business provides.
Pay particular attention to long-term quotations and fixed-price contracts. Costs may change between agreeing a price and completing the work, affecting both profitability and cash requirements.
5. Match spending decisions to available cash
Review planned equipment purchases, expansion projects, inventory orders and discretionary expenditure against your updated forecast.
Assess both the initial payment and the ongoing commitment. A new asset may also require maintenance, insurance, staffing or additional working capital.
Prioritise spending that protects essential operations or delivers a clear, measurable benefit. Where appropriate, consider phasing a project or negotiating payment terms with suppliers.
Keep statutory obligations and agreed payment commitments visible in your planning. Decisions to retain cash should account for their effect on compliance, supplier relationships and the business’s ability to operate.
A useful starting point is to bring together your latest management accounts, debtors’ and creditors’ age analyses, borrowing schedules and upcoming tax payment dates. Together, these records help turn a cash-flow concern into a practical action plan.
Plan your next steps with HLB CMA SA Inc.
Our accounting, financial management and advisory services help businesses understand their financial position and make informed decisions.
Visit our website to learn more about our services and contact our team to discuss your cash-flow and financial planning needs.
Originally published by HLB CMA SA Inc. on 4 October 2026 on LinkedIn.
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