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  • Writer's pictureJoseph Blogna

Cash Flow for Small Business

No matter what business you speak to cash flow is vital for a strong and successful business. The challenge facing many businesses today is to ensure that you don’t run out of money.


A simple way to manage your cashflow is to map your cash cycle for three months. This will help you understand how cash is flowing in and out of your business.

  1. Label each month

  2. Record cash in for each week

  3. Record cash out for each week

When calculating your cash inflow each month it is vital that you factor out the GST that is on your sales and owed to the ATO. So many businesses rely on the GST of these sales for cashflow but it is recommended that you put your GST liability aside each month in a separate bank account so that you are ready to pay the ATO when it's due.


The ATO as put together a good Action Plan:

  1. Gather your business figures

  2. Map your business cash flow and identify when it has positive and negative cash flow

  3. Complete the cash flow spreadsheet with your business figures

  4. Analyse your business cash flow by asking the four key cash flow questions

    1. What is your cash position?

    2. How much do you need for your tax and super commitments?

    3. How much is available to spend?

    4. Has your business improved?

  5. Use the information in the spreadsheet to highlight areas of your business cash flow that are concerning you

  6. Test potential changes in your business. Fill in the spreadsheet with the figures you expect as a result of the changes to see if they will give you the results you are looking for. Continue to tailor your ideas until they give you a result you are happy with.

  7. Implement your business ideas and track their progress regularly by comparing your current figures against your previous figures to see if your business is improving and checking it against your target results

  8. Set up a regular date in your calendar to review your cash flow position using the cash flow canvas


For more information about cashflow management, reach out to an Empros Expert - Click Here

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