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2020-04-21 21:29:49AccountantsEnglishAfter you analyse the current cash situation and develop a forecast, you can focus on identifying the best ways to help clients adjust how...https://quickbooks.intuit.com/au/resources/au_qrc/uploads/2020/04/Hero.jpghttps://quickbooks.intuit.com/au/resources/accountants/maximising-cash-flow/3. Maximising cash flow

3. Maximising cash flow

5 min read

After you analyse the current cash situation and develop a forecast, you can focus on identifying the best ways to help clients adjust how they manage their cash flow. They’ll likely need to implement a combination of approaches to both increase money coming in and decrease what they spend. As you did with the forecasting, use the data from key QuickBooks reports to come up with recommended courses of action. 

Increase money in

Speeding up existing revenue streams or finding new ones can give clients an infusion of cash that they can use immediately to continue running the business.

Accelerate accounts receivable 

QuickBooks has several reports to help you quickly identify which customers have outstanding balances and who owes the most. You and your clients can then choose how to manage these accounts to increase cash on hand.

To see which customers owe the most, use the Open Invoices report. 

For a detailed breakdown of how much each customer owes and the due dates, check the Customer balance detail report.

Explore tax relief funding options

There are many options available for small businesses to secure loans, grants, and other funds. For up-to-date information about state and local relief available in your area, check our state-by-state guide.

Review ATO Tax Relief Options The Australia Taxation Office (ATO) is implementing a series of relief options to assist those impacted by the coronavirus. The relief will not be automatically applied. You will need to contact the ATO to make any of the following requests for assistance. 

  • Businesses can call the ATO’s Emergency Support Infoline (1800 806 218) to discuss relief options based on their needs and circumstances. 
  • Individuals and businesses can request deferral of some payments (by up to 4 months) and vary instalments. 
  • Businesses (under $20 million turnover) can elect to report and pay their GST monthly instead of quarterly to accelerate access to GST refunds, but only from 1 April 2020, and must remain monthly for 12 months. 
  • Quarterly payers can vary their PAYG instalments for the March 2020 quarter, and claim a refund of instalments paid for the Sep and Dec 2019 quarters. 
  • Businesses can request remittance of interest and penalties applied to tax liabilities incurred after 23 January 2020. 
  • Businesses can request a low interest payment plan. 
  • Employers still need to meet their SG obligations. The ATO has no discretion under the SGC rules to vary the due date or waive the SGC where contributions are late/unpaid.

Other ideas

You can work with your clients to implement creative ways to adjust their business models and increase their revenue options. Here are some ideas to get started:

Reduce money out

The less money clients spend, the longer their cash reserves will last. Several strategies can help clients manage their expenditures and have an immediate effect on their cash flow. If your clients use autopay for their bills, suggest that they turn it off until you prioritise the spending.

Lower or defer payments

Encourage clients to work with vendors, lenders, and government agencies to explore options for deferring payments or restructuring terms and rates. Use report data from QuickBooks to help your clients prioritise who to contact. 

Reduce fixed expenses

Large monthly expenses are the easiest to identify. Lowering them can have a substantial impact on available cash for the business. 

Rent: Use the rent or lease QuickReport to get the average monthly rent expenses. 

Insurance: Use the Transaction detail by account report to see monthly insurance expenses.

Check current bill status

It may be most helpful to start with the bills that are already due. Vendors may be flexible on timing or be able to offer payment plans.

For a snapshot of due and overdue bills, use the Unpaid bills report. 

To see how much your client owes each of their vendors, use the Expenses by vendor summary report.

Explore options to defer loans and taxes 

To identify lenders or other note-holders to contact about deferring loan payments, use the Transaction detail by account report.

For a list of the client’s tax agencies, use the Taxable sales detail report.  

To calculate how much payroll tax the client pays, use the Total payroll cost report. 

Cut back discretionary spending

There’s a wide range of expenses that clients can control. Identifying items that aren’t necessary—either in the short term or at all—can alleviate some of the stress around negatively affecting cash flow. If your clients use autopay for their bills, suggest that they turn it off until you prioritise the spending.

Marketing and advertising

Marketing budgets typically have some flexibility, and clients should be able to adjust them for the next few months. To see average spending, use the Transaction detail by account report. 

Subscriptions and memberships 

Clients may have subscriptions or memberships that aren’t necessary in the short term. Canceling or suspending them can result in immediate savings. To track dues or ongoing subscription expenses, use the dues and subscriptions account QuickReport.  

This content is for information purposes only and should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Australia Pty Ltd. does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit Australia Pty Ltd. does not warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers should verify statements before relying on them.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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