Entering the final quarter of the year is not merely an accounting milestone. For companies, it is a period in which decisions concerning cash, collections, liabilities and financing are directly translated into the year-end result.

The end of the third quarter and the beginning of the fourth traditionally represent one of the most important periods for liquidity management. Companies are simultaneously entering the final stage of the business year, preparing budgets for the following year, settling tax and other due obligations, financing existing projects and making investment decisions that will shape the next business cycle. For precisely this reason, September and the beginning of the final quarter should not be viewed merely as a time to analyse results achieved, but above all as a time for serious cash-flow planning.

One of the most common mistakes in business is equating profit with liquidity. A company may experience revenue growth, have a significant number of contracted projects and report a positive operating result, while at the same time facing substantial cash-flow pressure. The difference between the moment revenue is recognised, when an invoice is issued, when a receivable will actually be collected and when obligations to suppliers, employees, banks and the government fall due can be decisive for business stability.

Liquidity should therefore not be managed only when cash begins to run short. Liquidity is a strategic issue and must be managed proactively. Serious financial planning requires a projection of expected cash inflows and outflows at least through the end of the financial year, an analysis of the ageing and collectability of receivables, accurate recording of future tax obligations, a review of existing borrowings and available credit lines, as well as a realistic assessment of the funds required for planned investments.

Particular attention should be paid to working capital. Business growth almost always requires additional liquidity. New contracts, higher turnover and increased business volume may initially appear to be exclusively positive indicators, but they can simultaneously create a significant need for additional financing to bridge the period between the occurrence of costs and the collection of revenue. This is why fast-growing companies sometimes have greater liquidity requirements than companies whose revenues are stagnating.

In this context, receivables management becomes just as important as sales. Revenue that has been invoiced but remains uncollected for months cannot finance salaries, taxes, suppliers or new investments. At the end of the third quarter, companies should therefore conduct a detailed analysis of their receivables, determine the expected collection schedule and take timely action wherever delays exist. Every day by which the average collection period can be shortened has a direct impact on available liquidity.

It is equally important to engage in timely discussions with banks and other sources of financing. The best time to secure additional liquidity is before it becomes necessary. A credit line, revolving financing, factoring or another appropriate instrument arranged while the company maintains a stable financial position represents an instrument of capital management. Financing sought only after a liquidity problem has arisen is often negotiated under time pressure and with significantly less bargaining power on the part of the company.

The end of the third quarter is also the right time to begin financial planning for the following year. The 2027 budget should not be viewed merely as a projection of revenues and expenses. A high-quality budget must also answer how much capital will be required to achieve the planned growth, from which sources that capital will be secured and how its cost will affect business profitability.

That is why the fourth quarter should not simply be awaited — it should be prepared for.

Companies that already at the beginning of September know how much cash they expect to receive by 31 December, when it will be collected, which obligations they will face, how much capital their planned investments require and which financing sources are available to them enter the year-end period with significantly greater confidence and freedom of decision-making. Liquidity then ceases to be a day-to-day concern and becomes what it should be — one of the instruments for managing and developing the company.

At StandardPrva, we believe that modern business advisory services must go beyond the accounting recording of what has already happened. We see our role as looking ahead together with our clients — towards their cash flows, tax obligations, financing, investments and long-term development.

For precisely this reason, StandardPrva is also working on the further development of its own financial infrastructure. As part of this process, we are preparing a project to establish a new financial institution focused on the needs of businesses, liquidity, working capital and modern business financing models. The public will be informed in due course about the structure, services and next steps of this project.

Because businesses today need more than quality advice on how to manage capital. They need reliable partners and new sources of capital for growth.

StandardPrva
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