Cashflow is King, Queen and things Royal!

Cash flow is the life blood of any business – whether a small sole trader or an international multi million corporate, without cash flow the business will simply cease to exist.

What You Need To Know About Cashflow Management

The sad thing is, that your lack of planning or appreciation of cash flow is not just putting your business & livelihood at risk, but also those of each and every other business you interact with on trading terms, as their cash flow would be dependent on your business meeting its financial obligations, and so it spirals on, into an ever increasing ripple, as not every business has the reserves or facilities to “carry” their debtors for an undetermined period of time.

The same principle applies to statutory payments due to the ATO, State Revenue etc. the difference being that these institutions have the power to raise interest and or penalties – effectively increasing pressure on already stretched cash reserves.

What The ATO Says About This

Both the ATO and Federal Government recognise this issue – from the Government perspective, the introduction of the Payment Times Reporting Scheme (PTRS) – aimed at ensuring the large entities (turn over in excess of $10m, pay their debtors with turnover of less than $10m within a maximum term of 30 days. Unfortunately this does not address the issue of small and medium-sized business that transact between themselves.

The ATO has issued a basic educational piece around cashflow management (Cash flow | in an attempt to educate small businesses owners on the importance of cashflow and some tips on cashflow management.

Asset Financial Accounting Assisting With Cashflow Management

As professional accountants and bookkeepers, the team at Asset Financial Accounting are well versed in cashflow management and are able to assist clients set realistic budgets linked to achievable cashflow projections and management.

If you would like to discuss your options, or are in need of professional tax assistance, please call our office on 08 9409 7054 for a confidential chat to view your options.

About The Author

This article was written by the Asset Financial Accounting team.

By providing our clients with quality advice and developing strong business relationships, Asset Financial Accounting strives to create sustainable opportunities for growing businesses to achieve financial success.

Our current services include bookkeeping, financial and tax accounting, budgeting, financial reporting and taxation returns.

We also offer a “virtual CFO” service for businesses that need more advanced financial coaching, a process of understanding the business, identifying areas of potential growth and assisting the business to implement better processes. Staff training and “translating” financial facts and figures are a core aspect of this tailored service.

Visit Asset Financial Accounting.