For many producers, summer might bring a surge of orders from farm shops, delis, and hospitality venues, only for trade to slow dramatically come January. Others face the opposite problem - Christmas hamper season pushes them to produce flat out from September, but cash doesn't land in the bank until November or December.
This guide breaks down exactly how to manage cash flow when your business is seasonal, without the financial jargon - just practical steps you can start using now.
Cash flow isn't just about how much money you make — it's about when that money arrives versus when you need to spend it. For food and drink producers, this timing gap can be brutal.
Consider a small-batch elderflower cordial producer. They might need to buy raw ingredients and bottles in April, ramp up production through May and June, start selling in July, and then wait 30–60 days for wholesale customers to actually pay their invoices. On paper, the business is profitable. In reality, the owner is borrowing from their personal account to cover payroll.
This isn't unusual. It's the nature of the industry. But with the right approach, it's entirely manageable.
A word on terminology
Cash flow = the actual movement of money in and out of your bank account.
Profit = the difference between your revenue and costs on paper.
A business can be profitable and still run out of cash. That's why cash flow needs its own attention.
Before you can manage your cash flow, you need to see it. The best way to do this is to build a simple 12-month cash flow forecast — a month-by-month view of your expected income and outgoings.
What to include on the income side:
• Direct sales (farmers' markets, online shop, your own premises)
• Wholesale orders — and the payment terms attached to each account
• Seasonal spikes (Christmas, Easter, summer festivals, Valentine's Day)
• Any grants, loans, or other funding
What to include on the cost side:
• Ingredients and raw materials — when do you actually pay your suppliers?
• Packaging, labelling, and fulfilment
• Staff costs, including any seasonal workers
• Rent, utilities, equipment servicing
• HMRC payments: VAT quarters, PAYE, Corporation Tax or Self-Assessment
Once you lay this out month by month, the danger periods become obvious. You're looking for the months where outgoings exceed income — those are the gaps you need to plan for.
Practical tip
You don't need expensive software to do this. A basic spreadsheet works perfectly. What matters is that you update it regularly — ideally monthly — as actuals replace estimates.
If you'd like a simple template to get started, sign up for our newsletter below and we'll send one across.
Wholesale accounts are wonderful for volume — but payment terms can quietly strangle your cash flow. Net 30, net 60, or even net 90-day terms mean you've spent money producing goods weeks or months before you see a penny back.
Here's what you can do about it:
• Don't just accept whatever a buyer proposes. If 30-day terms are available, push for them. If you're a smaller supplier negotiating with a large retailer, 45 days is often achievable. Review your payment terms.
• Until a customer has proven they pay reliably, ask for payment upfront or on delivery. Use pro forma invoices for new accounts.
• Many small producers delay sending invoices — sometimes by weeks. Every day you delay is a day added to your wait for cash. Invoice promptly.
• Don't wait for overdue notices to pile up. A friendly reminder email two days before the due date dramatically improves payment rates. Chase invoices proactively.
• Offering a 1–2% discount for payment within 7 days can be worth it when you're cash-tight. Consider early payment incentives.
For your biggest seasonal customers — the ones placing large Christmas or summer orders — consider asking for a deposit upfront. Many buyers in the food and drink trade will accept this, especially if you've built a good relationship with them.
The most reliable protection against seasonal cash flow problems is a cash buffer — a reserve held specifically for the lean months. It sounds obvious, but many producers reinvest every penny of their peak season earnings straight back into growth, leaving nothing in reserve when January arrives.
A reasonable target is three months of fixed operating costs held in a separate savings or instant-access business account. This covers your rent, staff, and supplier commitments even if sales drop to zero for a quarter.
To build this reserve, treat it like a fixed cost during your good months. If August is strong, move a set amount to your reserve account before you start spending. Automate the transfer if you can — when it happens automatically, you're far less likely to dip into it.
Example: Craft brewery seasonal planning
A small craft brewery generates around 65% of its annual revenue between May and October. During those months, the owners now ringfence 15% of net revenue into a reserve account — treating it exactly as they would a tax payment. This covers their base costs through the quieter winter months without touching their overdraft facility, which they keep available for large ingredient purchases in spring.
Stock is cash sitting on a shelf. Over-ordering ingredients or packaging to 'be safe' ties up money you might urgently need elsewhere. Getting smarter about stock management is one of the most immediate ways to improve cash flow.
• rather than forecast demand — especially for perishable ingredients. Order based on confirmed orders where possible,
• just as your buyers negotiate with you. Many ingredient suppliers will offer 30-day terms to established customers. Ask. Negotiate payment terms with your suppliers,
• If you pay on the 1st of every month, make sure your biggest invoices are due to arrive from customers before then. Look at supplier payment schedules.
• securing ingredient volumes in advance without paying for them all upfront. Explore supply agreements for your peak season,
If you work with a small number of key suppliers, a honest conversation about your business's seasonal pattern can lead to flexible arrangements that work for both sides. Suppliers want to keep good customers — most are willing to be pragmatic.
You don't need to be a numbers person to run your business financially. But there are three figures every food and drink producer should know off the top of their head:
1. Your monthly cash burn
How much does it cost to keep your business running for one month, even if you sell nothing? This is your fixed cost baseline — rent, salaries, loan repayments, subscriptions. Know this number and you know exactly how many months your reserve can cover.
2. Your debtor days
This tells you how long, on average, it takes your customers to pay you. If the number is creeping above your payment terms, your cash flow is silently being eroded.
3. Your working capital gap
This is the difference between what you're owed (debtors + stock) and what you owe (creditors). If you're owed more than you owe, you're in a healthy position. If it's the other way around, you need to act before it becomes a crisis.
Quick self-check
Can you answer these right now?
• What are your fixed costs per month?
• How long does it take your average customer to pay you?
• How many months of cash reserve do you currently hold?
If you can't, that's the starting point.
Even with strong planning, seasonal cash flow gaps sometimes need bridging. The key is knowing your options before you're in a crisis — because in a crisis, your options shrink and become more expensive.
Government-backed options
The British Business Bank offers a range of loan and guarantee schemes, some specifically designed for food and agriculture businesses. Recovery Loan Scheme-backed facilities are available through most high street banks.
Asset-based lending
If you have equipment or vehicles, asset finance allows you to release the value tied up in those assets. It's particularly useful for producers investing in new production equipment during a growth phase.
Invoice finance
Invoice finance (sometimes called factoring or invoice discounting) lets you borrow against the value of your unpaid invoices. You receive a percentage of the invoice value immediately, with the remainder (less a fee) paid once your customer settles. It's not right for everyone, but for producers with large wholesale accounts and long payment terms, it can transform cash flow.
Seasonal overdraft facilities
If you have an established banking relationship, a pre-agreed seasonal overdraft is often the simplest tool. The critical thing is to arrange this during a good period — banks are far more receptive to lending when you don't urgently need it.
A specialist accountant can help you model which option makes most sense for your business and present your case to lenders in the strongest possible way.
Many food and drink producers manage cash flow reactively — checking the bank account and hoping it's enough. That approach works until it doesn't.
Working with an accountant who specialises in the food and drink sector means you get advice that's relevant to your actual situation — not generic small business guidance. They'll understand the margin pressures you're dealing with, the challenges of wholesale payment terms, the impact of ingredient price volatility, and the seasonal patterns that shape your year.
At Roake & Cook, we work with lots of different food and drink businesses — from producers and growers through to farm shops and hospitality operators. We help our clients build proper financial visibility into their businesses, so that cash flow stops being a source of anxiety and becomes something they feel genuinely in control of.
If you'd like to explore what better financial management could look like for your business, we'd love to hear from you.
• Build a 12-month cash flow forecast and update it monthly
• Tighten your payment terms and chase invoices proactively
• Ringfence a cash reserve during peak months — treat it like a tax payment
• Renegotiate supplier terms and manage stock tightly
• Know your three key numbers: cash burn, debtor days, and working capital gap
• Explore your funding options before you're in a tight spot
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