Cash Flow Management Tips Every Melbourne Business Should Know in 2026

Managing cash flow is a foundational part of keeping a business viable. Having enough cash on hand to cover wages, suppliers, tax, and super is critical to keeping the business running day to day. Businesses need to be able to not just show a profit on paper, but also simply pay themselves. Running a business is about staying in control and strong cash flow habits help you plan ahead and avoid last-minute pressure. These cash flow management tips are designed to help you at any stage of your business journey, from sole trader to SMEs.

Why Cash Flow Matters for Growing Businesses

Cash flow is simply the timing of money in and out of your business. And it can look very different from your profit on a profit and loss sheet. You can be profitable on paper. But you can still be in a position where you don’t have enough cash to pay your bills if money doesn’t arrive when you need it.​ This can compromise your ability to scale.

Inability to grow isn’t the only problem. It can actually put you in the red. Poor cash flow and lack of planning are common reasons small businesses get into trouble, or can lead to insolvency, even when revenue looks strong. Not planning for tax and super can quickly lead to arrears. Company directors are expected to keep a close eye on solvency and make sure the business can meet its debts as they fall due.

As your business gains pace and as you add staff, take on bigger premises or sign larger contracts, your fixed commitments grow, which means poorly timed cash inflows can put far more pressure on the business. Wages, rent, loan repayments, tax and super are commitments that continue to compound. Without the right mitigation strategy, problems snowball. 

This is why SMEs lean on financial advisers to stress‑test their cash flows and spot risks early, rather than reacting once the bank account is already under pressure.

Cash Flow Management Tip #1 – Get Clear on Your Cash Position

Do a Weekly Cash Flow Review

Set a weekly ‘cash check‑in’ to review your current bank balance, review what’s come in and gone out, and list any large bills due in the next few weeks. This allows an “early warning system” to spot issues before they escalate.​

Track Your Income and Expenses

Self‑employed people and small business owners need to track income and expenses actively. Cash flow issues are an invisible problem because they may appear irregularly. Unsurprisingly, failing to prepare for this issue without a plan puts business owners into reactive mode, and sometimes makes them too reactive. Many Australian businesses are non-employing and owner-operated, many with variable income, so planning for this has never been more critical.

Run Monthly Management Reports for Larger Businesses

For more established businesses, this means having monthly management reports that break down cash by business unit or site, so leaders can see which parts of the business are generating cash and which are absorbing it. Using financial reports and forecasts together to understand and manage business cash flows.​

The Practice helps Melbourne business owners and leadership teams interpret these numbers, not just produce them, with a comprehensive business advisory service.

Cash Flow Management Tip #2 – Build a 12‑Month Cash Flow Forecast

Use a cash flow budget to map out when money is likely to come in and go out so you can plan for wages, suppliers, tax and super before the bills hit. A 12‑month rolling forecast should be an essential part of operating a business, regardless of the size. This shouldn’t be a one‑off, it should be a consistent part of your operations, allowing you to make projections and then compare actual figures to these projections. Factor in sales, debtor timing, operating costs, finance, tax and super, so every major decision gets checked against future cash.

For small businesses, the ATO offers a Cash Flow Kit, which can be a valuable resource for self-management when outsourcing to a business advisory firm is not an option.

What to Include in Your Cash Flow Forecast 

Projected sales

Include projected sales and when customers are likely to pay, not just invoice dates. The timing of receipts is critical. Cash flow is not the same as sales.

Regular Operating Costs

Regular operating costs are core expenses including wages, rent, utilities, subscriptions, leases and loan repayments. 

Tax and Super Obligations

Tax and super obligations, such as GST/BAS, PAYG and super contributions, in the month they are due. Treat these in cash flow, not treating them as surprises. For larger businesses, add capital expenditure, multi‑site overheads and any loan covenants that depend on cash or profit.

How to Create Your Cash Flow Forecasting Plan

Step 1 – Use history

Start with at least 12 months of actual data (bank statements and P&L) to understand seasonal trends and major cost spikes. Use historical figures as the base for your forecast.

Step 2 – Estimate income realistically

Estimate future sales using that history and realistic assumptions. Realistically is the key word here. MoneySmart warns against overly optimistic projections, especially when income is variable. Then use past 12‑month earnings to guide forward planning when income fluctuates.​

Step 3 – Enter inflows when paid

Enter cash inflows in the month you expect to be paid, not when you issue invoices.

Step 4 – Enter outflows when due

Enter all expected outflows, wages, rent, loan repayments, tax, super and major purchases in the month they fall due, using tax calendars and loan schedules to anchor dates.

Step 5 – Analyse and act

Review each month’s projected bank balance, highlight any periods where cash looks tight or negative, and use that insight to adjust spending, pricing, or funding. Our experienced business advisors help create this cash flow plan with you.

Cash Flow Management Tip #3: Speed Up Receivables and Strengthen Terms

Slow‑paying customers aren’t just frustrating. They categorically become a major cause of cash flow squeezes. WA Small Business Development flag slow payments and poor debtor processes as key issues.

A problem that feels constant often comes down to process. Invoice as soon as the work is delivered, shorten payment terms where appropriate, and use automated reminders to follow up consistently. If your margins allow, consider offering a small discount for early payment as an incentive.

Complement this by putting clear internal payment processes in place so bills are paid on time, but not unnecessarily early, to preserve cash in the business while still maintaining good supplier relationships.

Document a structured debtor escalation process so every overdue invoice is handled the same way. For example, set standard stages: friendly reminder before due date, automatic reminder on due date, follow‑up at 7 and 14 days overdue, then a clear escalation step if payment still isn’t received.

Larger businesses can apply these strategies and go even further by segmenting credit policies, monitoring group‑level debtor days and reviewing big‑customer concentration risk at management or board level.

These are hands-on strategic processes that are best done in collaboration with one of our financial advisors in order to create a workflow that is easy to follow.

Cash Flow Management Tip #4: Manage Expenses and Working Capital at Scale

Know thy money. Understand where your money goes and separate essential and non‑essential spending, a principle that applies just as strongly to business overheads. Put your money into “needs, wants and goals” buckets, separating them and reviewing where money is going each month.

Seek to minimise costs by reviewing overheads regularly, negotiating with suppliers and avoiding holding excess or obsolete stock. This will simply free up cash and contribute to a buffer. 

Include unused or low‑value subscriptions and software in your regular cost review. Cancel or consolidate anything that no longer earns its keep.

If need be, add extra levers such as monitoring inventory turnover across sites, reviewing staff levels and cross-referencing against demand and, where needed, restructure finance.

Cash Flow Management Tip #5: Plan for Tax, Super and Regulatory Obligations

The ATO is clear that the best way to meet tax and super obligations is to build them into your cash flow planning and set money aside regularly, rather than treating them as last‑minute bills. 

Falling behind on BAS, PAYG or super is a common warning sign that cash flow systems aren’t working and need immediate attention. Further unpaid tax and super often signal deeper cash issues.

The ATO’s Cash Flow Coaching Kit is used across Australia to help small businesses and advisers talk through cash flow, viability and obligations using simple visual tools. The kit is described as an evidence‑based framework to support small‑business viability and decision‑making.

We work with Melbourne businesses of all sizes to map all statutory due dates into their forecasts and set up separate ‘tax and super’ accounts.

Cash Flow Management Tip #6: Build a Cash Buffer and Funding Strategy

The Australian Government’s National Financial Capability Strategy emphasises building buffers and planning for shocks as key behaviours for financial resilience, and that principle applies directly to business cash flow. The strategy talks about saving, planning and building safety nets for small businesses.​

In practice, that might mean gradually building a reserve that covers several months of fixed costs, using small, regular transfers rather than waiting for a ‘spare’ lump sum. Never underestimate the power of making small, regular contributions to savings and placing them into separate accounts for big bills.​ A workable, sustainable contribution will continue to grow, allowing for your bottom line to grow. 

If you’re a more established business, combine internal cash buffers with external facilities such as overdrafts or lines of credit as part of a structured working capital strategy. This will help manage seasonality and growth.

When to Involve a Business Adviser

Getting guidance is only part of the cash flow challenge. Getting help that is specifically tailored to you is how you can apply cash flow strategies in the real world. A financial adviser combines their experience of working with a variety of Australian businesses with insight into your own business to create a cash flow strategy. The Practice acts as a critical advisory partner for Australian business operators, in the major cities or wherever your business may be. Having strategies to protect your cash flow is helpful. Having a financial advisor as an intermediary can make all the difference. 

Get in Touch with our team with a free consultation; they are ready to support you and your business.

 

FAQs

What is cash flow and how is it different from profit?

Cash flow is the movement of money into and out of your business bank accounts over time. Profit is an accounting measure of revenue minus expenses for a period, and you can show a profit while still lacking enough cash to pay bills if your inflows are delayed.
Managing cash flow means focusing on when money is actually received and paid, not just on whether the business is profitable on paper.

Why is cash flow so critical for small and growing businesses?

Cash flow determines whether you can meet immediate obligations such as wages, rent, suppliers, loan repayments, tax and superannuation. “Poor cash flow and limited planning can contribute to financial stress and, in some cases, insolvency. As businesses grow and take on more fixed costs, misaligned inflows and outflows can create serious pressure even when revenue is increasing.

How often should I review my business cash position?

A weekly review of actual cash in the bank, recent movements and upcoming major payments is a practical minimum. Monthly management reporting that includes cash metrics is appropriate for more established or multi‑site businesses. Frequent reviews act as an early warning system, allowing time to adjust spending or seek advice before cash shortages occur.

What is a cash flow forecast and why do I need one?

A cash flow forecast is a forward‑looking estimate of expected cash inflows and outflows over a defined period, typically 12 months. A cash flow budget or forecast is a key planning tool to see when cash surpluses or shortfalls are likely. Forecasting supports better decisions about hiring, capital expenditure, pricing and funding by showing their impact on future bank balances.

What should I include in a 12‑month cash flow forecast?

Include projected customer receipts based on when invoices are expected to be paid, not just when they are issued. List all regular operating costs such as wages, rent, utilities, subscriptions, leases and loan repayments. Incorporate tax and superannuation obligations, including BAS, PAYG and income tax, in the months those payments fall due.

How do I start building a cash flow forecast in practice?

Use at least 12 months of historical financial and bank data to understand income patterns and major cost timing. Estimate future income using realistic assumptions and adjust for known changes such as growth plans or price changes. Enter inflows and outflows by expected payment date, then calculate month‑end balances to identify periods of tight cash.

What are early warning signs of cash flow problems?

Consistently operating at or near overdraft limits is a common warning sign.
Falling behind on BAS, PAYG or superannuation payments indicates that cash is not being set aside for obligations. Increasing delays in paying suppliers, or relying on personal funds to cover business expenses, signal structural cash flow issues that should be anticipated ideally before they occur.

How can I improve cash flow from customers who pay late?

Invoice as soon as work is completed or goods are delivered rather than waiting for the month‑end. Set clear payment terms, offer convenient payment options and use reminder schedules to follow up overdue accounts. Request deposits or progress payments for large or custom jobs to reduce exposure to late or non‑payment.

What practical steps can I take to manage expenses and working capital?

Regularly review overheads to identify unused or non‑essential costs that can be reduced or removed. Monitor stock levels, replace slow‑moving or obsolete items, and use “just in time” ordering where feasible to avoid tying up excess cash in inventory.
Use full supplier payment terms where appropriate to preserve cash, while maintaining agreed relationships and conditions.

How should I plan for tax and superannuation in my cash flow?

Estimate tax liabilities and include them as separate lines in your cash flow forecast.
Transfer a proportion of income to a dedicated tax and superannuation account on a regular basis rather than waiting for due dates. Superannuation is required by law. With Payday Super commencing from 1 July 2026, factor super into each pay run and your cash flow forecast so it’s covered on time.

What is a sensible approach to building a business cash buffer?

Aim to progressively build a reserve that can cover several months of core operating costs, tailored to your risk profile and industry volatility. Use small, regular transfers into a separate savings or high‑interest account rather than relying on occasional surplus cash. Combine internal buffers with appropriate external facilities, such as overdrafts or lines of credit, as part of a broader working capital strategy.

When should I seek professional advice about cash flow?

Seek advice if you regularly struggle to meet tax,  superannuation or supplier payments on time or rely on personal funds to cover business costs. Quality advice should include cash flow projections and clear explanations of how recommended strategies fit your situation.

Engaging a business adviser or accountant early allows you to address structural issues, improve systems and plan funding rather than reacting to crises.

 

This article contains general information only and does not take into account your business objectives, financial situation or needs. Before making any financial decisions, you should consider seeking advice from a qualified financial advisor or lending professional who can assess your individual circumstances.