What keeps us all awake at night? Cash flow! Whether you’re a tradie waiting on that next invoice, a retailer riding the post-holiday slump, or a startup hustling to scale, cash flow is the lifeblood of your business. You’re set to thrive once you get it right, but getting it wrong is a one-way ticket to a stress-fest.

Worry not! We have good news for you. Managing cash flow doesn’t have to be a nightmare. You don’t have to be a number gymnast either. All you need are a few practical hacks to keep that cash cruising along. Dive in with us to learn more about actionable tips that any Australian SME can use to stay on top of their game. 

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1. Know Your Numbers: Get a Grip on Your Cash Flow Forecast

A cash flow forecast is just a sneak peek at what’s coming in and going out. Think of it like checking the surf report before you hit the beach; you wouldn’t paddle out blind, right?

Just start simple. Grab a spreadsheet and list your expected income, such as sales, invoices, and maybe a side gig, and your regular expenses like rent, wages, and that Australian Taxation Office (ATO) bill. The ATO has some ace resources to help you figure out what to include, including Goods and Services Tax (GST) and pay-as-you-go (PAYG) instalments. They even offer free templates to get you started!

Say, if you’re a tradie in Brissy, you might notice jobs slow down around the wet season. A quick forecast can help you spot that dip and plan ahead. You can also save a bit extra or chase early payments. The Australian government even has a cash flow forecasting guide that’s very easy to follow. Spend at least 20 minutes a week on this, and you’ll feel like the captain of your ship, not a passenger. You’ve got the smarts for this, give it a try!

2. Speed Up Payments: No Awkward Chats

Feeling like you’re chasing clients with a stick just to get paid? You’re definitely not alone. Late payments are a massive headache for SMEs, costing billions every year according to the Australian Small Business and Family Enterprise Ombudsman (ASBFEO). However, this does not mean the end for SMEs. Flip the script and get that cash in faster without breaking a sweat.

Start by setting clear terms, say, 7 or 14 days, and put them on every invoice. Make paying you a breeze with options like PayID or card payments. A quick message saying “Hey, just sent your invoice, let me know if it’s all good!” can nudge things along, too. The ASBFEO got your back here! They’ve been pushing for fairer payment times and payment via the least-cost route.

If someone’s still dragging their feet, never shy away from doing a friendly follow-up. You can even offer a small discount for early birds, say, 2% off if they pay in 5 days. It’s a tiny trade-off for cash in hand. 

3. Keep Costs in Check: Be Smart, Not Stingy

Running an SME in Australia isn’t a walk in the park. GST, rising supply costs, and keeping the lights on can eat into your cash fast. However, you don’t have to let expenses run wild. A little cost-trimming can keep your cash flow humming without skimping on what really matters.

Take a look at your last few months of spending. Do you spot anything you don’t really need? Maybe that extra software sub or bulk stock gathering dust? Cut it. You can also check out the Small Business Energy Incentive to get 20% bonus tax deduction on expenditure for energy-saving upgrades, such as better lighting or equipment. 

Don’t hesitate to negotiate with suppliers, too. Ask for a discount or better terms. You’d be surprised how often they’ll say yes just to keep your business. It’s not about being stingy; it’s about making your money work harder so you can grow. Juggle smarter!

4. Build a Safety Net: Stay Prepared

Here’s the golden rule: always have a cash buffer for when things go sour. Life’s full of surprises, be it a busted machine, a quiet month, or a client who vanishes. A little stash can save your bacon and keep your business on the right track.

Aim for one to three months of must-have expenses like rent, wages, and utilities. Start small: tuck away at least 5% to 10% of every payment into a separate account. If you’re pulling in $8,000 a month, that’s $400 to $800 saved each time. It adds up quickly! You may also want to look at ATO’s instant asset write-offs to free up your cash buffer.  

As you can see, a buffer isn’t just a safety net. It gives you freedom to say “yes” to a big opportunity or “no” to panic when things get bumpy.

Bringing It All Together: You’re Ready to Thrive

Always remember: 

• Know your numbers to stay ahead.
• Get paid faster to keep the cash coming.
• Trim the fat to save money but never skimp on what is needed.
• Build a safety net for whatever’s around the corner. 

These aren’t just tips; they’re tools to turn cash flow from a headache into your secret weapon.

Running a business is difficult, no doubt about it. But you’re not in this alone. Start with one of these tips today, maybe a quick forecast or a friendly payment nudge, and watch how it shifts things. You’ve already got the grit and the vision. Now let’s add some cash flow confidence to the mix. Keep in mind that you’re not just running a business, you’re building a legacy. 

Here at Tank Insurance, we’re all about giving Aussie SMEs the tools to shine, no matter where you’re at. Hungry for more biz wisdom? Swing by our blog for trustworthy guides on growth, team-building, and beyond, crafted to help you rock your business with a big grin and zero stress!