The email landed just after lunch. Three lines. A supplier needs paying this week, there are two payrolls right behind it, and the money to cover all three does not currently exist. Twenty minutes later, the follow-up arrived: do we have a backup plan? Names changed and details blurred, as always, but that is what a cash flow crisis actually looks like.
It is not a graph trending gently downward over six months. It is an ordinary weekday afternoon, a number, and a date that is closer than you would like.
I have been on the receiving end of that email more times than I can count, and I will be on the receiving end of it again. So this week, rather than pretending it never happens, I want to walk through what actually gets a business from that afternoon to the other side. Because the owners who get through are not the lucky ones. They are the ones who do a handful of unglamorous things in the right order.
What do you do when you can’t make payroll?
Get the exact number, protect your staff first, and get on the phone before the deadline rather than after it. That is the short answer. Here is the longer one.
Get the real number. Not “we’re a bit short.” The actual shortfall, and the actual date. A bank or a supplier can work with $38,000 by next Friday. Nobody can work with a bad feeling. Half the panic in a cash crisis is fog, and the number burns the fog off.
Staff come first. Wages are a legal obligation, but that is almost beside the point. Your team can forgive a lot. What they struggle to forgive is finding out their pay was uncertain after the fact. If wages are genuinely at risk, the worst plan is silence. And once a team loses confidence that pay arrives on pay day, you are fighting a battle on two fronts.
Call the bank before the day. Banks can move surprisingly fast when they are asked early and given information. Asked on the day, the main thing they can offer is sympathy. A temporary overdraft extension or a short term facility is a routine conversation on Monday and a very difficult one on Friday afternoon.
Ring the supplier yourself. Not an email from accounts. A phone call from the owner. A supplier who hears from you a week early, with a date attached, will usually flex. A supplier who finds out from a failed payment will not. And you will need them again next month, so the relationship is worth more than the awkwardness of the call.
IRD last, and never silently. If something has to wait, GST and provisional tax have formal arrangements available, and Inland Revenue would far rather hear from you than chase you. But there is a world of difference between arranging time to pay and quietly not paying PAYE. One is a plan. The other follows you around.
The backup plan question
Here is the uncomfortable bit: the second email was the better one. “Do we have a backup plan?” might be the most useful question in small business finance. It just tends to get asked at the wrong time, the same way nobody shops for a smoke alarm while the kitchen is on fire.
A real cash flow crisis plan gets built in the calm months, and it has three parts.
An overdraft you are not using. Banks lend umbrellas when it is sunny. Ask for one then. An approved facility sitting undrawn costs very little and turns a crisis week into an inconvenient week.
A buffer, even a modest one. The old target of three months of costs in reserve is out of reach for plenty of businesses right now. Fine. One payroll cycle of buffer still changes everything about how a bad fortnight feels.
A 13 week cashflow forecast. This is the unglamorous hero of the whole story. Thirteen columns on a page. Money you expect in, money you know is going out, running balance along the bottom. Butcher’s paper would do the job (you know how fond I am of butcher’s paper). The owners who keep one are almost never ambushed. And the ambush is the expensive part.
Why more cash flow crisis emails are coming
This is not a one-client story. EY analysis reported by RNZ this week put numbers on what the fuel price shock is doing to the economy: somewhere between $1 billion and nearly $3 billion of lost output, depending on how long it drags on, with the pain concentrated in transport, construction, fishing and agriculture. Read that list again. It is more or less the Eastern Bay’s CV.
The same analysts made a blunter point: after two years of weak growth, most households and businesses have no buffer left. That is how a cash flow crisis happens in 2026. Not one big blow. A thin buffer meeting an ordinary bad month.
None of that is a reason to panic. It is a reason to expect the gap to widen between businesses that watch their cash weekly and businesses that get introduced to their bank balance once a month by their accountant.
So if you do one thing this week, make it this: half an hour, a spreadsheet or a sheet of butcher’s paper, and the next thirteen weeks of money in and money out. If there is a hole coming, you have just bought yourself weeks to fix it instead of hours.
Because the best version of that after-lunch email is the one that gets sent three months early. Same words. Lower case. And enough time to answer the backup plan question properly.
Feeling worried? Give us a call and lets chat!