Survived to ‘25? Now unlock cash flow and drive productivity forward.
While many Kiwis will be kicking back at the beach in the early new year, thousands of business owners will be bracing for the January 15 provisional tax deadline. But for these hard-working business owners, this date doesn’t have to be a burden. Instead, it can be a springboard for growth.
It’s been a rough few years for SMEs – the companies with less than 50 staff who make up 97% of all business enterprises in Aotearoa and employ 30% of the nation’s workforce. Many are coming off the back of a recession or still feeling the impact of the economic downturn – and for more than a few, it’s been a battle to “survive to ‘25.”
Nicola and Josh Taylor co-founded the financial-technology company Tax Traders twelve years ago. Earlier this year they launched Taxi, an innovative venture that aims to empower SMEs with quick and affordable access to funding.
Nicola says with Taxi, provisional tax is no longer a handbrake but instead can be used to help SMEs grow – it can be used as a launchpad for investment rather than being seen simply as more money going out of the business.
She explains that at its core, the venture helps SMEs put their provisional tax payments back into their business, reducing reliance on high-interest funding sources like overdrafts and credit cards. Funding SMEs through Taxi could unlock up to $18.5 billion of idle taxpayer funds, empowering hard-working and ambitious Kiwi business owners to reinvest in growth.
As the NZ Institute of Economic Research says in a paper analysing Taxi, “A small number of large businesses have been accessing capital using the provisional tax framework in this way for many years. Due to the complex nature of the legal framework, this benefit has been unavailable to most New Zealand businesses.”
If there’s one thing that gets under Nicola’s skin, it’s inequity. “When I see something that should be available to everyone, but it’s only available to some and that’s determined by how big you are and how much money you have, I don’t think it’s fair – and I don’t think it’s good for the country.”
Drawing from her years of experience assisting a range of corporates, large and small, to maximise their cashflows, Nicola says there are seven steps that SMEs can take to facilitate cash flow in 2025:
1. Use tax to your advantage
“Access business funding at about half the rate of a big bank overdraft with Taxi. Paying your provisional tax through Taxi will unlock funding for your business to do more of what you do best. With Taxi’s interest rate currently just 5.90%, this is a great opportunity to turn tax time into growth time.”
2. Get paid faster
“Chase, chase, chase. Your accounts receivable is essential to your cash flow. Actively follow up on overdue invoices by consistently chasing clients, especially those over 90 days late. For clients significantly overdue, pick up the phone. If this is constantly an issue, look at updating your payment terms to ask for upfront payment.”
3. Prioritise completion and billing
“Work in progress (WIP) can often tie up significant amounts of capital. Monitor all ongoing projects to ensure timely completion and billing. Address any scope overruns with clients promptly to bill for extra work and protect margins. Invoice immediately upon job completion instead of waiting until month-end and prioritise finishing nearly completed jobs to accelerate payment. Evaluate whether you’re taking on too many low-margin projects.”
4. Keep cash longer
“Managing accounts payable is just as important as chasing down receivables. Start by checking your supplier payment terms to avoid paying too early. If you’re running behind, open a conversation — many suppliers are open to extended terms if you have ongoing orders. With a solid payment history, you might secure an extra 30 days to pay. Holding on to cash longer strengthens your liquidity without additional financing.”
5. Cut costs and optimise stock
“Boost your cash flow by managing inventory wisely. Regularly review stock turnover to identify slow-moving or low-margin items and consider flash sales to quickly convert idle stock into cash. Align orders with actual demand to prevent over-stocking, keeping cash free for immediate needs. Evaluate storage costs for flexibility and potential savings.”
6. Sell idle equipment
“Idle assets such as unused cars, trucks or machinery can represent a significant drain on your resources. Consider selling them and hiring or leasing equipment.”
7. When external debt is needed
“Once you’ve optimised your balance sheet and pulled all possible internal levers, you’ll have a much clearer picture of where your cash flow gaps lie. Understanding the exact size and nature of your cash shortfall will allow you to secure only as much financing as you need, keeping debt costs manageable.
“If you have high-interest debt with second-tier lenders or a business overdraft, using Taxi to fund the payment of your tax can help you pay off this debt and take advantage of Taxi’s competitive interest rates.”
To find out how Taxi can help your business grow visit gotaxi.co.nz