Map the liability
Confirm the current business tax liabilities and due dates using reliable records. Avoid working from estimates when current ATO account information is available to the business and its registered tax adviser.
Map the operating cycle
List regular cash inflows and major outflows such as payroll, suppliers, rent, fuel, materials, inventory and equipment commitments. A business can be profitable on paper while still experiencing periods where payments fall due before customers pay.
Identify whether the problem is temporary or structural
A one-off project delay, seasonal working-capital gap or unusually large tax payment is different from a business that regularly cannot meet normal operating expenses. Financing should not be used to hide a recurring operating deficit without a credible plan to correct it.
Speak with the right advisers
Tax treatment and ATO arrangements are matters for the business and its registered tax adviser. Funding decisions should be assessed separately from tax advice. If the business is under significant financial pressure, directors should also obtain appropriate restructuring or legal advice.
Build a forward cash-flow forecast
business.gov.au describes a cash-flow forecast as an estimate of future sales and costs that can help identify shortages and surpluses. A practical forecast can show whether resolving a particular liability actually restores adequate operating headroom.
Sources and further reading
- https://business.gov.au/finance/cash-flow/set-up-a-cash-flow-statement
- https://www.asic.gov.au/for-business-and-companies/business-basics/small-business-resources/
General information only. This material does not constitute legal, tax, credit or financial advice. SME Capital Partners is in pre-launch and is not currently offering or approving credit through this website.