Small business cash flow | Fastest Finance guide

You’ve done the happy-month maths. Everyone has. “If the new machine brings in even three extra jobs a week, it pays for itself.” Maybe it will. But the bank account doesn’t run on maybe. It runs on whether the money is there on the 28th.

So this guide starts somewhere less exciting: your cash flow in the worst month you’ve had. Get that straight, and working out what the business can comfortably repay gets a lot easier. Finance should be built on the quiet months, not the ones you’re hoping for.

1 Know your rhythm

Money rarely arrives in a straight line. Write down when it actually lands, not when you send the invoice.

How long do customers really take to pay? Thirty-day terms often mean forty-five.
Which months are quiet: the Christmas shutdown, the wet season, school holidays?
Which months carry the lumpy bills: BAS, PAYG instalments, super, insurance, rego, annual fees, tax?
Is there a customer who always pays late? What would a month without that payment look like?
Do you get deposits upfront, or do you carry the costs until the job is done?

2 Wages, super and your own pay

Wages and super go out on schedule whether or not your customers pay on time. And then there’s you. If you don’t pay yourself properly, you’re borrowing from your own household. Treat your pay as a fixed cost, not whatever’s left.

3 GST isn’t your money

Park it somewhere you can’t spend it

If you’re registered for GST, the GST in your takings belongs to the ATO. Keep it in a separate account so it’s there when the BAS is due. You must register once your GST turnover reaches the threshold (currently $75,000). Quarterly BAS is generally due on 28 October, 28 February, 28 April and 28 July, with extra time in some cases. The ATO’s website shows the current dates.

Struggling to pay the ATO on time? Contact them before the due date. Payment plans are available, and interest applies to late amounts. The ATO is on 13 11 42.

4 The quiet-month test

Fill in the last twelve months, or your best estimate. Money out includes GST and BAS set-asides, wages and super, rent, insurance, fuel, repayments you already have, and your own pay.

Month	Money in	Money out	Left over
July
August
September
October
November
December
January
February
March
April
May
June
Your tightest month

Want to go through it together? We’re happy to go over this with you on the phone, so it all makes sense before you decide anything. Call us on (03) 7045 5388, choose “Phone call” when you send an enquiry, or email broker@fastestfinance.com.au.

Your tightest month is the number that matters. A new repayment has to fit inside it, with room to spare. As an example only: if your quietest month leaves $2,000 after everything else, a $2,000 repayment leaves you at exactly nothing. Aim well under, and keep some cash aside for surprises.

If your tightest month is already in the red, that’s the thing to sort out first.

5 Will it pay for itself?

Put numbers on the claim, and be conservative.

Per month	Your estimate
Extra income, or money saved, because of the purchase
Costs it adds: running costs, insurance, training
Net benefit

Now run it again at half. If the new work only comes in at half what you hoped, is the repayment still comfortable? We can work through this one with you on the phone too. Call us on (03) 7045 5388, or choose “Phone call” when you send an enquiry.

6 Shape the finance to the business

Term, deposit, final payment and repayment frequency all change how repayments feel. A longer term lowers each repayment but usually costs more in total. A bigger deposit means borrowing less. A final payment (balloon) keeps repayments lower along the way but leaves a lump sum to find at the end. Different finance options have different requirements, costs and repayment terms, and lenders differ too, so it’s worth looking at a couple of structures side by side. That’s something we do with you.

If cash flow is already tight

That’s common, and it’s not a failure. Talk to someone early. The Small Business Debt Helpline (1800 413 828) offers free and confidential financial counselling (Monday to Friday, 9am to 5:30pm). Tell suppliers and creditors before a payment is missed, and ask your lender’s hardship team what’s possible.

7 Tax questions worth checking

We’re not tax advisers, and tax is a big part of any purchase. The ATO’s website has the current rules. These are worth checking before you sign:

How will this purchase be treated for tax: deductions, depreciation and GST credits?
Does buying, leasing or hiring suit my tax position best?
How much should I set aside each month for BAS, PAYG and super?
How big a cash buffer should the business hold?
Does my structure (sole trader, company or trust) change anything?
Is a big tax bill or ATO instalment coming up that affects the timing?

Ready to talk numbers?

Bring your tightest-month number and tell us what the business needs, roughly how much and when. We’ll talk through what looks realistic and which structures might suit. Business finance still involves checks and requirements, and we’ll explain what applies to your situation, along with applicable fees, charges and how we are paid, before you decide to proceed.

Speak to a broker

Prefer to call or write? Call (03) 7045 5388 or email broker@fastestfinance.com.au

How much can your business comfortably repay?