When talking about new and established businesses, you’ve probably heard someone say ‘cash is king’ before, and that’s because it is. Cash flow is a critical area for businesses so I’ve prepared a few tips to help you stay moving in the right direction with managing your cash flow on a day-to-day. You can watch the video or read the breakdown below:

things to keep in mind

There are a few pitfalls and items most businesses should be aware of to ensure you have enough cash on hand to pay obligations as they are due to keep the doors open.

BAS Lodgements

One thing that business owners often overlook is their quarterly business activity statement [BAS] lodgements. These can result in some large payable amounts due to net GST, withholding on staff wages, as well as income tax instalments or fringe benefits tax [FBT] instalments.

These are due 28 days post the end of the quarter, or four weeks later if lodged via a tax agent. This can be provisioned by reviewing your GST accounts and withholding tax accounts at the end of each month and putting these funds aside into a separate bank account to provision for tax.

super payments for staff

Another item that’s often overlooked or paid late, is superannuation for staff. There’s been an increase to 10% on ordinary timed earning for staff this year, and similar to the BAS lodgements, these are also due 28 days post-quarter-end. These payments can also be provisioned similar to the GST, by way of reviewing your accounts at month-end and putting funds aside for this.

It is worth keeping in mind that this has been a large ATO review area recently for late payment. Contributions that are paid late will not be tax-deductible and other penalties may apply.

tax returns

The final item that looms over business owners’ heads, is the lodgement of income tax returns. This is paid and due 15th of May subsequent from the financial year [some exceptions to this may apply].

For companies, there is a flat rate of tax of 25% for most small businesses. A simple way to provision for this each period is to review your profit and loss at the end of each month or quarter, and take a flat 25% of that profit and put it aside into a separate bank account to provision for tax. This way you don’t get to year-end and you’re caught with a nasty surprise with a big tax bill and no money to pay it.

we’re here to help

If you have any further questions in relation to any of these issues, or want some help, please feel free to reach out to our team at businessDEPOT for assistance at oneplace@businessdepot.com.au or give us a buzz on 1300 BDEPOT.