Your business is selling more than ever, yet somehow you still feel short on cash. This is a common feeling for many businesses, and it doesn’t mean you are doing anything wrong. Sales are only one part of the story. When costs, tax, stock and debt payments climb at the same time as your takings, the extra money can disappear before it ever settles in your account.
The wider industry market helps explain the squeeze. Westpac’s June 2026 Retail Spending Pulse found that per-person card spending rose 0.4% in June, the first increase in three months. That sounds encouraging, but the broader trend has stayed flat, with spending tracking sideways since February as cost of living pressures hold people back. So, a small lift in sales does not always signal a real recovery.
Revenue, profit and cash are three different things
It helps to separate three numbers that often get lumped together.
- Sales (revenue) is the total amount of money coming in from what you sell.
- Gross profit is what is left of your sales after the direct cost of the goods or ingredients you sold is subtracted. Your gross margin is that profit shown as a percentage of sales.
- Cash in the bank is what you actually have available once wages, suppliers, rent, loan repayments and tax have gone out.
A strong trading week can still leave very little behind. Say you take an extra $8,000 over a busy weekend. After rostering more staff, paying suppliers for the additional stock you sold, and setting aside GST (goods and services tax, the 15% you collect on sales and pass to Inland Revenue), that bumper weekend might add only a few hundred dollars to your bank balance.
Wage costs need regular review
Payroll is usually the first or second largest cost, so small changes add up quickly. The adult minimum wage rose to $23.95 an hour on 1 April 2026, up from $23.50. The direct rise looks modest, but it ripples outward. You may need to increase pay for more experienced staff to keep fair gaps between roles, and higher base rates also increase holiday pay, leave costs and your KiwiSaver employer contributions.
The most useful figure to watch is your wage cost percentage, which is total wages measured against sales, not just the dollar total on your payroll report. Tracking that percentage shows whether your roster accurately represents how busy you actually are.
Pricing and margins need to reflect current costs
If your prices were set a year ago, they are probably built on costs that no longer exist.
For hospitality, that means reviewing food and beverage costings, checking that menu prices still cover what each dish costs to make, and looking at the margin on every product line. For retail, it means watching stock turnover (how quickly you sell and replace stock), keeping discipline around discounting, and reducing wastage. Regularly review your pricing, margins, discounts and stock turnover so the money you make on each sale keeps pace with what you spend.
GST and PAYE are not spare cash
This is where a lot of tight months turn into real trouble. The GST you collect and the PAYE you deduct from staff wages (the pay-as-you-earn tax passed to Inland Revenue) were never your money. It is best practice to ring-fence those amounts in a separate account, so they are ready when returns are due.
It matters right now because Inland Revenue confirmed in January 2026 that it is actively focused on collecting overdue GST and employer debt, with steps that can lead to bank deductions or, in serious cases, liquidation. Protecting this cash keeps you well clear of that.
A simple monthly cash flow check
A cash flow forecast is simply a plan of the money you expect in and out over the coming weeks and months. You can start with a quick monthly review of these seven things:
- Sales by product, service line or day
- Gross margin
- Wage cost percentage
- Stock turnover
- Rent and supplier commitments
- GST, PAYE and loan payments
- Cash reserve
When to ask for help
Reach out when sales are rising but cash is not, when tax payments are slipping behind, or when you cannot clearly see which parts of your business are actually making money. Retail owners are feeling this most. A fresh set of eyes often finds the leak faster.
If your hospitality or retail business is selling more but still feeling short on cash, Moore Markhams can help you review your margins, pricing, wage costs and cash flow forecast. Talk to us about a margin, pricing and cash flow review, and see how our Cash Flow and Forecasting and Business Management Advice services support hospitality and retail operators across New Zealand. Reach out to your local Moore Markhams Advisor today.
