What to Do in the 90 Days Before Your Fiscal Year Ends -- Cash Flow Actions That Matter
- Bob Livingston
- 3 days ago
- 15 min read
Owner question: "We are approaching the end of our fiscal year. I know there are things I should be doing from a financial management standpoint, but the year-end planning always feels reactive -- I do what the accountant tells me to do. What should I be doing proactively in the last 90 days to set the business up well financially?" |
Written by Robert S. Livingston Founder, BusinessWiser. Over more than four decades in business, Robert's career progressed from manager roles at Mobil Oil, Mattel Toys, and PepsiCo to executive leadership -- serving as CFO, Managing Director, President, and CEO across businesses from $3M to $100M+ in revenue. He also built and operated six businesses of his own. BusinessWiser is built on that experience, validated through a seven-year Advisory Circle of 120+ SMBs and 50+ consulting engagements. Published May 2026 | More About Robert S Livingston |
Introduction
Year-end financial planning for most SMB owners is an accounting exercise -- gather documents for the tax return, review the year's P&L with the accountant, make a few year-end expense decisions, and move on. This approach captures the compliance dimension of year-end but misses the management dimension: the 90-day window before the fiscal year closes is one of the most valuable planning periods of the year, and most owners do not use it for the cash flow and business management actions that would produce the most value.
The 90-day year-end window is valuable for four specific reasons. First, it is the period when the full-year financial picture comes into focus -- trends that have been developing all year become visible in their complete form. Second, it is when the working capital position needs to be assessed and addressed before the new year begins. Third, it is when the new year's cash flow plan should be built from current actuals rather than starting from scratch in January. Fourth, it is when specific cash flow actions -- receivables acceleration, inventory review, tax-advantaged capital decisions -- have the most immediate and direct impact.
NOW CFO's 2025 year-end cash flow analysis confirms the stakes: year-end is an opportune time for businesses to assess their financial position, implement strategies for maintaining liquidity, and create the conditions for the new year's growth. BMSS's manufacturing-specific year-end analysis adds the industry dimension: year-end is when manufacturers can take advantage of depreciation incentives, accelerate receivables, and build the cash position that enters the new year.
This article organizes the 90-day year-end actions into five categories -- receivables, inventory and payables, capital and tax decisions, the new year plan, and the annual financial review -- with a specific timeline for each.
Why This Window Matters More Than Most Owners Realize
The 90-day year-end window matters for cash flow management in ways that are not intuitive until they are explained. The year-end bank balance and balance sheet become the starting point for the new year's working capital calculations, the lender's assessment in the annual credit review, and the business's financial state at the beginning of the next planning cycle. A business that enters the new year with a strong receivables position, optimized inventory, a well-funded reserve, and a completed cash flow plan for the coming year is starting from a fundamentally different position than one that enters January with extended receivables, excess inventory, a depleted reserve, and no forward financial plan.
The decisions made in the 90-day window compound into the new year's financial outcomes. An aggressive receivables collection effort in October through December produces not just stronger year-end cash but also a cleaner aging report that starts the new year -- meaning the January receivables management effort begins from a better baseline. An inventory review and reduction effort in the same period enters the new year with less excess to manage. The new year's cash flow plan, built in November and December from current actuals, starts the new year with 2 to 3 months of forecast history rather than starting from scratch in January with pure projections.
90-Day Year-End Action Plan -- Five Categories
Category 1: Receivables Acceleration (Days 90 to 30 before year-end)
This is the highest-cash-impact year-end action for most product-based businesses. The objective is to end the year with the cleanest, most current receivables aging possible -- which both maximizes the year-end cash balance and starts the new year with a strong collection position.
Specific actions: run the receivables aging immediately and identify every invoice more than 15 days past due. Contact each one directly with professional follow-up -- phone calls, not just emails, for accounts over 30 days past due. For accounts 60 days past due or more, escalate the conversation to the appropriate level and ask for a payment commitment with a specific date. For accounts 90 days past due or more, make a deliberate decision: pursue aggressively with specific action, offer a payment arrangement, or make the bad debt write-off decision before year-end (which has tax implications your accountant should advise on).
Year-end goal: reduce DSO to or below the trailing 12-month average. A DSO that enters the new year at or below the average is a receivables position that does not carry excess aging from the prior year into the first quarter. NOW CFO's year-end analysis specifically identifies prompt collection of outstanding receivables as crucial for maintaining cash flow stability and preparing for the new year.
Category 2: Inventory Review and Year-End Payables Management (Days 90 to 45 before year-end)
Inventory: conduct the full inventory diagnostic described in the inventory article -- turns by category, ABC analysis, age profile. Identify excess and slow-moving items and make deliberate disposition decisions before year-end. Items that are written down or written off produce a tax benefit in the current year. Items that are discounted and sold generate cash before year-end. Items that are returned to suppliers recover working capital that would otherwise remain in aging stock.
The BMSS manufacturing year-end analysis specifically identifies inventory management as a key year-end action area: companies should review inventory accounting methods and consider options to minimize tax burdens and improve cash flow. This includes the LIFO/FIFO review your accountant handles, but also the physical inventory discipline of identifying and addressing slow-moving stock before the year-end balance is locked.
Payables: review the current accounts payable aging. Any invoices that are past due should be addressed before year-end -- either paid or discussed with the supplier to maintain the relationship. Invoices that are due in the first weeks of the new year should be scheduled in the payment system so the new year begins with no immediate payables pressure. Confirm that the payables strategy -- paying at terms, not early -- is in place for the year-end payment cycle.
Category 3: Capital and Tax-Advantaged Decisions (Days 90 to 15 before year-end)
This is where the accountant's role intersects most directly with the cash flow management actions in this article. The 90-day window is when equipment purchases that will be placed in service before year-end qualify for the current year's Section 179 deduction and bonus depreciation. BMSS's analysis confirms: manufacturers that purchase and place into service eligible equipment after January 19, 2025 can immediately deduct the entire cost under 100% bonus depreciation -- a significant tax-cash benefit for businesses with taxable income to offset.
The decision framework from the equipment financing article applies here: evaluate whether the equipment is needed operationally, whether the business has adequate working capital for the down payment without falling below the minimum reserve, and whether the taxable income level makes the Section 179 deduction valuable. If all three conditions are met, a year-end equipment purchase with Section 179 expensing is one of the most tax-efficient capital decisions available.
Other year-end capital and tax decisions: retirement plan contributions (SEP-IRA, Solo 401(k), defined benefit plan contributions reduce taxable income and build personal wealth simultaneously), timing of bonus payments (accelerating deductible bonuses into the current year), and review of any prepaid expenses that could be accelerated to provide current-year deductions. These decisions should be made with the accountant and the annual cash flow plan in view simultaneously -- the tax benefit is real, but it should not compromise the working capital position entering the new year.
Category 4: Building the New Year's Cash Flow Plan (Days 60 to 15 before year-end)
The new year's annual cash flow plan should be built in the last 60 days of the fiscal year, not in the first 30 days of the new one. Building it in November and December (for a December fiscal year-end) means it is grounded in current actuals -- the actual Q3 and Q4 performance, the current receivables and payables position, the known capital decisions for Q1, and the realistic revenue trajectory coming out of the year.
Specific content of the new year plan: the revenue projection by month with the seasonal distribution based on the prior 2 to 3 years, the collections timing model applied to the revenue projection, the COGS and purchasing schedule, the monthly expense schedule with timing specificity for large irregular items, the capital expenditure and debt service plan for the year, the owner compensation and distribution plan, and the reserve-building allocation.
The output: a month-by-month cash position projection for the full new year, with the minimum buffer marked on each month. Any month where the projection approaches or falls below the minimum buffer is a planning problem to address before the year begins -- through line of credit availability confirmation, receivables acceleration in the prior quarter, or expenditure timing adjustment. Entering the new year with a complete cash flow plan that identifies and addresses pressure months in advance is one of the highest-value year-end management actions available.
Category 5: The Annual Financial Review -- Assessing the Year Honestly (Days 30 to 15 before year-end)
The annual financial review is distinct from the monthly review in scope and purpose. It examines the full-year performance across multiple dimensions and draws the strategic conclusions that should inform the new year's plan.
Full-year P&L analysis: did gross margin improve, hold, or decline over the year? What drove the change? Are there specific product lines or customer segments where margin performance was materially different from the average? What does the full-year operating expense ratio show -- is the cost structure scaling appropriately with revenue or is it growing faster?
Full-year cash flow analysis: did operating cash flow track close to net profit (working capital well managed) or significantly below (working capital consuming cash)? Which driver -- receivables, inventory, payables -- produced the most cash pressure or improvement over the year? Did the reserve grow, hold, or decline? What was the average DSCR for the year?
Self-Sustainable Growth Rate: Recalculate the Self-Sustainable Growth Rate using the company's current operating cash flow, Total Cash Required per $1 of Growth, and year-end revenue base. Is it higher or lower than the prior year? Does it support the growth objectives in the new year's plan? If the Self-Sustainable Growth Rate declined, what drove the change? Was it lower operating cash flow, higher working capital requirements, increased capital spending needs, additional staffing requirements, or other growth-related cash demands? What actions can be taken in the coming year to improve the business's ability to fund growth internally?
Key decision: Does the new year's plan need to be adjusted based on the annual review conclusions? If the full-year analysis reveals a margin trend problem, the new year's plan should include a pricing review action. If the Self-Sustainable Growth Rate declined, the planned growth rate, capital spending plan, hiring plan, or owner distribution strategy may need adjustment. The purpose of the annual review is to identify these issues before they become cash flow constraints and to make strategic adjustments that improve the accuracy and financial viability of the new year's plan.
If you're not familiar with the Self-Sustainable Growth Rate—or have never measured how growth affects your cash flow—visit RobertSLivingston.com. Qualified SMB business owners can download the Growing Broke Prevention Toolkit at no cost. The toolkit includes the Growing Broke Calculator, the Self-Sustainable Growth Calculator, and supporting resources designed to help product-based businesses understand the true cash flow impact of growth, identify potential financial pressure before it occurs, and determine how fast they can safely grow without creating unnecessary cash flow strain.
The Year-End Timeline in Brief
• Day 90 before year-end: launch the receivables acceleration effort. Run the aging report, make the collection calls, begin the process of cleaning the aging before year-end.
• Day 75 before year-end: conduct the inventory review. Identify excess and slow-moving items, make disposition decisions, initiate returns and markdowns.
• Day 60 before year-end: begin building the new year's cash flow plan. Gather the inputs (prior year actuals, current receivables and payables position, known capital decisions), and build the month-by-month projection.
• Day 45 before year-end: meet with the accountant for the year-end tax strategy discussion. Evaluate equipment purchases, retirement contributions, bonus timing, and any other year-end tax decisions with the cash flow plan in hand.
• Day 30 before year-end: finalize the receivables collection effort. Any accounts still significantly past due should have a specific resolution plan by this point.
• Day 15 before year-end: complete the annual financial review. Assess the full-year P&L, cash flow, driver performance, and Self-Sustainable Growth Rate (SSGR). Make any final adjustments to the new year's plan based on the review conclusions.
• Year-end: review the 13-week forecast with the new year's first 13 weeks visible. Confirm the year-end cash position and the opening position for the new year.
Warning Signs That Year-End Planning Is Not Being Used Effectively
• The receivables aging entering the new year has a larger 60-plus-day bucket than it had at the same point last year. Year-end receivables cleanup was not completed or was not aggressive enough.
• The new year begins without a completed annual cash flow plan. January financial management starts from scratch with pure projections rather than from the current actuals that should have been incorporated in November and December.
• Capital decisions are made in January that could have been made more tax-efficiently in December. The Section 179 and bonus depreciation window closed without being assessed.
• The SSGR has not been recalculated for the new year. The new year's growth planning is proceeding without knowing whether the financial structure can support it.
• The year-end reserve level is lower than the beginning-of-year level despite a profitable year. Profits were consumed by working capital or distributions without building the financial foundation.
What You Should Actually Understand About This
The 90-day year-end window is the period when the discipline described throughout this series produces its most concentrated and most visible value. The receivables acceleration effort turns months of systematic management into a year-end cash position that reflects the business's genuine strength. The inventory review and disposition decisions clean the balance sheet before it becomes the opening balance of the new year. The capital and tax decisions capture benefits that exist only within the year-end window. The new year plan, built from current actuals, starts the year with the forward visibility that makes proactive financial management possible from day one.
Owners who treat year-end as an accounting compliance exercise miss all of this. Owners who treat it as a concentrated financial management period end each year in a stronger position than they began it -- not because the year was necessarily better than projected, but because the year-end actions extracted the maximum value from whatever the year produced and set the strongest possible foundation for the year ahead.
Key Takeaways
• The 90-day year-end window is one of the most valuable financial management periods of the year -- used well, it strengthens the year-end position, establishes the new year's plan, and captures tax and capital benefits that exist only within the window.
• The five categories of year-end action are: receivables acceleration (days 90 to 30), inventory review and payables management (days 90 to 45), capital and tax-advantaged decisions (days 90 to 15), building the new year's cash flow plan (days 60 to 15), and the annual financial review (days 30 to 15).
• The most immediate cash-impact action is the receivables acceleration effort: aggressively collecting past-due accounts before year-end improves the year-end cash position and starts the new year with a cleaner aging report.
• The most forward-looking action is building the new year's cash flow plan in November and December rather than January -- grounding it in current actuals rather than pure projections and identifying pressure months before they arrive.
• Year-end is not just an accounting compliance period. It is when the compounding effect of a year's financial discipline is realized and the strongest possible foundation for the next year is established.
Frequently Asked Questions
Should I involve my accountant in the year-end cash flow actions described in this article?
Yes -- particularly for the capital and tax decisions in Category 3. Your accountant should be involved in any Section 179 and bonus depreciation decisions, retirement plan contributions, bonus timing, and inventory accounting method choices. The other actions -- receivables acceleration, inventory review, payables management, and the new year plan -- are management actions that the owner drives, with the accountant's annual financial review providing the accounting validation that the management conclusions are supported by the numbers.
What if my fiscal year does not end on December 31?
The 90-day action plan applies to any fiscal year-end. The specific timing of tax decisions should account for the actual year-end date. For businesses with a June 30 fiscal year-end, the receivables acceleration effort begins in April, the new year plan is built in May and June, and the tax decisions are assessed before June 30. The categories and actions are the same; only the specific dates change.
How much of the receivables aging can realistically be cleaned up in 90 days?
A focused 90-day receivables effort typically recovers 60% to 80% of the collectible past-due balance -- the invoices that are genuinely owed but have been allowed to age without consistent follow-up. The remaining 20% to 40% typically represents either disputed invoices that require resolution time, customers in genuine financial difficulty, or accounts that are effectively bad debts and should be written off. The year-end write-off decision on truly uncollectable accounts is itself a valuable year-end action -- it clears the aging of fictitious assets and produces a current-year tax deduction.
How does the year-end cash flow plan differ from the annual plan I build at the beginning of the year?
They are the same document -- the annual cash flow plan -- but built at different points in time. When built in November and December for the coming year, the plan has 10 to 11 months of actual performance data to ground the assumptions, and the year-end balance sheet position as the starting point. When built in January, it has only the prior year's actuals as a baseline and starts with the actual January opening balance rather than a projected one. The November and December build produces a more accurate and more actionable plan than the January build -- which is why it is one of the five year-end management actions that matter most.
Related Articles
• What Every SMB Owner Should Know About Equipment Financing and Its Cash Flow Impact
• How Excess Inventory Traps Cash in Your Manufacturing or Distribution Business
• How to Use Accounts Payable Strategically to Improve Cash Flow Without Damaging Supplier Relationships
• The Cash Flow Habits of Financially Strong SMB Owners — What They Do That Most Do Not
A Note About This Article
This article was developed in response to a question commonly asked by SMB owners and business leaders. The topic was selected through research into the questions owners frequently ask online, then expanded using real-world operating experience, business leadership experience, and practical insight gained from working with product-based SMBs.
Research helps identify the question.
Experience helps answer it.
While understanding a problem is important, improving business performance typically requires more than information alone. It requires visibility, structure, discipline, and execution.
That is the purpose behind the BusinessWiser™ resources, tools, frameworks, and systems — helping product-based SMB owners move from understanding problems to implementing practical solutions that strengthen cash flow, improve decision-making, and support long-term business success.
Continue Exploring BusinessWiser™
Foundational Booklets
Built to change how owners understand cash flow, growth, decision-making, and long-term business strength.
Available free to qualified SMB business owners.
• The Cash Flow Trifecta™ Understand how cash flow influences business strength, owner wealth, and quality of life—and why it deserves more attention than almost any other business metric.
• The Five Uses of Cash Flow™ Learn a practical framework for allocating cash flow in ways that strengthen the business while supporting long-term owner objectives.
• The Business Optimizer Loop™ Discover a structured 90-day operating rhythm that helps transform insight into action and keeps improvement efforts moving forward.
• The Hidden Fortune in Your Cash Flow™ See how small improvements across multiple areas of the business can compound into meaningful gains in cash flow and financial performance.
• The Business Optimization Secret Hidden in Plain Sight™ Explore why cash flow serves as the common thread connecting strategy, operations, finance, and long-term business success.
• WEALTHwiser™ Understand how business decisions influence compensation, distributions, business value, and the owner's long-term wealth-building potential.
• Tales from the Career Vault™ Learn practical lessons, patterns, and insights drawn from more than four decades of real-world business leadership and ownership experience.
Diagnostic Tools
Built to identify where cash flow is being constrained, strained, or lost.
Available free to qualified SMB business owners.
The Growing Broke Prevention Toolkit™
Growing Broke Calculator™
Sustainable Growth Calculator™
15-Category Cash Flow System Scan™
BusinessWiser™ Systems
The BusinessWiser™ Cash Flow Mastery System provides product-based SMB owners with a structured operating system for improving visibility, strengthening cash flow, and building long-term business resilience through integrated frameworks, reporting, planning, forecasting, and operating disciplines.
About Robert S. Livingston Robert S. Livingston is the founder of BusinessWiser™ and the creator of the Cash Flow Mastery System. Over more than four decades in business, his career progressed from manager roles at Mobil Oil, Mattel Toys, and PepsiCo to executive leadership — serving as CFO, Managing Director, President, and CEO across businesses from $3M to $100M+ in revenue. Along the way he built and operated six businesses of his own. His experience spans manufacturing, wholesale distribution, food, publishing, software, consumer products, and apparel. After retiring from full-time executive leadership, he spent seven years running a structured Advisory Circle — 20 members at a time, 120+ SMBs over the full seven years — alongside 50+ consulting engagements with product-based SMB owners, pressure-testing and refining the frameworks that now form the BusinessWiser™ system. His mission is to give SMB owners the clarity, visibility, and operating discipline that most only get through expensive advisors — built into a system they can run themselves. |
Sources 1. NOW CFO. Cash Flow Management During Year-End, December 2025. nowcfo.com 2. BMSS Advisors and CPAs. Maximizing Year-End Cash Flow for Manufacturing Companies, December 2025. bmss.com 3. CFO Plans. 2025 Year-End Financial Checklist for Precision and Growth, December 2025. cfoplans.com 4. Account Mobility. Year-End Financial Checklist for Small Businesses in 2025, October 2025. accountmobility.com |
Important Note
The information in this article is provided for educational and informational purposes only. Every business situation is unique. Before making significant financial, tax, legal, lending, accounting, operational, or business decisions, consult with qualified professional advisors who understand your specific circumstances.
Comments