Managing Cashflow Through the January Slump: Strategies for Service-Based Small Businesses

Athena Accounts
Nov 20
3 min read

January can be a challenging month for many small businesses. Sales dip, client activity slows down and cashflow can feel tighter than usual after the rush of Q4.

But the January slump doesn’t have to knock your business off course. With the right financial habits in place, you can protect your cash, plan confidently and start the year on steady ground.

In this post, I’m sharing practical steps small business owners can take to manage cashflow in January, plus how a bookkeeper can support you through it.

1. Review Your Cash Position Early

January often exposes issues that were hidden by December’s busyness. Before the month gets going, take time to review:

Current bank balances

Outstanding invoices

Upcoming bills

VAT, PAYE and Corporation Tax deadlines

Direct debits and subscriptions due in the next 30–60 days

This gives you a clear picture of what’s coming in and what’s going out, so there are no surprises.

We can help by preparing a simple cashflow snapshot or forecast so you always know your runway.

2. Prioritise Invoice Collection

If December invoices are still outstanding, January can feel even tougher.

Encourage clients to:

Pay early by adding payment links to your invoices for faster settlement

Set up Direct Debits for recurring services

Confirm payment terms before any new work starts

A gentle, well-timed reminder often speeds things up.

We can support with invoice chasing to keep your cashflow moving.

3. Delay Non-Essential Spending

January is not the moment for unnecessary purchases. Review any planned expenses and ask:

Is this urgent?

Will it generate income quickly?

Can it wait until February or March?

Small decisions add up, even delaying non-critical costs by a few weeks can relieve pressure.

4. Forecast by Week, Not Month

Cashflow issues are often timing issues. Instead of planning month-by-month, look at your cash week by week throughout January and February.

A weekly forecast helps you spot:

Gaps before they hit

Weeks where you may dip into the overdraft

Opportunities to move payment dates or invoice earlier

If you’d like help building a simple weekly cashflow forecast, we can create one tailored to your business.

5. Review Your Prices and Packages

January is the ideal moment to review pricing, especially for service-based businesses where costs increase yearly.

Consider:

Are your fees still profitable?

Have your overheads changed?

Are you doing more for the same money?

Do your packages reflect the value you deliver?

A small price increase now can transform your cash position for the year ahead.

6. Plan for Tax Bills

Tax deadlines and VAT quarters mean cash often leaves faster than usual in January.

To avoid last-minute stress:

Set aside tax consistently throughout the year – you can start making a change today

Check your liabilities early

Use separate “tax savings” accounts

Review whether you’re due a refund or owe more than expected

Want help planning for tax more confidently? We can help you build a simple tax plan.

7. Build a Cash Buffer for Future Slumps

Once you get through January, aim to set aside a small amount each month to build up cash reserves. A buffer of even one month’s expenses can reduce stress dramatically.