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2020-04-28 21:59:37COVID-19EnglishAfter you analyse the current cash situation and develop a forecast, you can focus on identifying the best ways to manage cash flow.https://quickbooks.intuit.com/au/resources/au_qrc/uploads/2020/04/SMBIllustration.pnghttps://quickbooks.intuit.com/au/resources/small-business-accounting/maximising-cash-flow-2/1. Maximising cash flow

1. 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 manage cash flow. You’ll likely need to implement a combination of approaches to both increase money coming in and decrease what you 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 a few capabilities to help you reduce accounts receivable outstanding and collect revenues faster. 

As your financial source of truth, QuickBooks has reports to help you quickly identify outstanding balances and who owes the most. You 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 try to implement creative ways to adjust your business models and increase revenues. Here are some ideas to get started:

  • Offer discounts on products/services to attract customers.
  • Personalise and send invoices out immediately to increase the chances of receiving payments on time.
  • Make it easy for customers to pay by accepting payments online. 
  • Offer discounts for customers who pay within a shortened time frame.

Reduce money out

The less money you spend, the longer your cash reserves will last. Several strategies can help manage your expenditures and have an immediate effect on your cash flow.

Lower or defer payments

Work with suppliers, lenders, and government agencies to explore options for deferring payments or restructuring terms and rates. Use report data from QuickBooks to help prioritise who to contact. 

Get tips on communicating with vendors

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 Transaction detail by account 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. Suppliers 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. 

Explore options to defer loans and taxes 

Cut back discretionary spending

There’s a wide range of expenses that you 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 you use autopay for your bills, suggest that you turn it off until you prioritise the spending.

Subscriptions and memberships 

You 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 Transaction detail by account Report.  

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.

We provide third party links as a convenience and for informational purposes only. Intuit Australia Pty Ltd does not endorse or approve these products and services, or the opinions of these corporations or organisations or individuals. Intuit Australia Pty Ltd accepts no responsibility for the accuracy, legality or content on these sites.

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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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