Six Tips to Take Control of Your Cash Flow

Managing my business

28 August 2015

Cash is the lifeblood of every business. But cash flows can be unpredictable, difficult to manage, and a source of stress for business owners.

Even the best businesses can face cash flow challenges. Consider this: Your business is doing well and your customers love what you do, but your bank balance says otherwise and you’re unsure how you will cover next week’s expenses.

Business owners learn very quickly that long-term success and business growth can be linked to being able to meet short term expenses.

It can be the difference between businesses that survive and businesses that thrive.

FAST FACT: According to our 2015 Bankwest Business Trends Report, the number of Australians running businesses grew by 16,471 year on year (to a total of 1,176,500).

Here are six tips to help effectively manage your business cash flow:

1. Map out your future cash flows

  • Use a cash flow forecasting tool to map out your expected costs and revenues, such as:
  • Review your expenses from last year to ensure there’s nothing you’ve missed.
  • Recognise any seasonality in your expenses and income.

2. Make your cash go further

  • Review your accounts and ensure you’re not paying any unnecessary fees, and are maximising the interest-free days on your business credit card.
  • Look to see if there are expenses you can pay in monthly instalments (ideally at no extra charge), spreading the cost throughout the year.
  • Consider leasing assets, rather than purchasing, or, alternatively look into business finance to spread costs over time.
  • Invest tax obligations, such as GST, in a separate high interest savings account until due for payment.

3. Managing cash inflows

  • Invoice your customers straight away, and follow up on outstanding invoices promptly.
  • Make it easy for customers to pay you quickly by choosing the right payment solution for your business, for example EFTPOS, BPAY® or online.
  • Have customers pay in advance, not in arrears, or offer a 30-day payment cycle.
  • Be clear about how payments should be made.
  • Be on good terms with whoever pays your invoices – this may not be the person you do business with, especially if it’s a large company or organisation.

4. Prepare for the unexpected

  • Make the most of online banking, by keeping a regular eye on your account.
  • Build up a cash reserve that can be a buffer from increases in supplier costs, delayed customer payments or any other unplanned expenses.
  • Consider pre-arranging an overdraft.
  • Know your plan B if you run into flow difficulties.
  • Emergencies, accidents and other unforeseen events can cripple cash flow. Make sure that you and your business are protected against the most common hazards through adequate insurances.

5. Forecast for growth

  • In periods of fast growth, costs precede revenue putting pressure on cash flow.
  • Use tools to forecast growth situations so you’re not caught short. You can use tools to such as our cash flow improvement calculator to forecast growth situations so you're not caught short.

6. Be open to seeking help

  • There are plenty of professionals who can provide new insights into cash flow management and other challenges. You can find a list of business specialists, accountants, government and bank contacts on
  • Consider finding a mentor such as an experienced small business owner from whom you can seek advice.
  • Don’t be afraid to ask for help.

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The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this publication without first obtaining specific professional advice. To the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL/Australian credit licence 234945, its related bodies corporate, employees and contractors accepts no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this publication.

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Managing cash flow
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