Business by design Part 2: Cashflow – lifeblood of a successful business

Clear Vision • September 27, 2016

ASIC’s business insolvency statistics suggest that inadequate cash flow or high cash use is the most often cited reason for a business failure.

So does that just mean they didn’t make enough money?  Or they couldn’t sell enough products or services?  Not necessarily.

Designing a successful business and achieving good cash flow is a lot more than just trying to sell as much of whatever product you have as possible.

At its simplest cash flow is just the movement of money in and out of the business.  But successful cash flow management involves knowing how the money moves, when it comes in, when it goes out and when potential problem times will arise.

So choosing the business by design approach what proactive steps should we take with cash flow:

Work to your peaks and troughs

Knowing your business has peaks and troughs in cashflow but just pressing on and hoping the troughs don’t get too deep at the wrong time is a recipe for disaster.  Work with your accountant or chief financial officer to understand how cash flow varies in your business.  Everyone is unique.  If you can, design payments for peak periods and minimise expenditure during the troughs.

Talk to your bank

Your bank wants you to succeed.  Get them on board by making sure your advisor knows exactly what cash flow means for your business.  Will money get tight at the end of each month?  Does it fluctuate with a few big sales during the year so you may need to increase an overdraft in the dry periods?  The more you talk to, and work with, your bank the better value you’ll get from this relationship.

Pay with what you have…not what you hope to have!

Many business owners are overly optimistic about future sales and also too eager to pay out creditors or invest in new projects when the money just isn’t there yet.  Avoid extending a line of credit or putting the squeeze on cash flow when you can simply delay the expenditure until you have the money actually to hand.

Invest in good advice

Clear Vision loves talking about cash flow.  Particularly when clients want to take proactive steps to managing and improving it.  Whether it’s us or someone else the value of good advice, sought early, to the success of your business is immeasurable.  We’ve seen hundreds of different business models.  We’ve seen them succeed and unfortunately we’ve seen them fail.  Invest in good advice and you’ll benefit from that experience to maximise your chances of success.

Don’t spend what you already owe

The delay between when money comes into a business and when you have to pay your GST and PAYG instalments causes problems for many businesses.  The right advice can keep these payments to the legal minimum but eventually the tax man must be paid.  Whether you simply keep some aside from every sale or design your cash flow so you can dedicate receipts at a particular time to tax payments you need to be ready.

Capital Gains Tax Implications of Subdividing Land in Australia

By Caroline Gillies • June 1, 2025
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Autumn Tax Tips: Make the Most of the Final Weeks Before Year-End

By Caroline Gillies • May 25, 2025
As we step into the final week of autumn and feel winter’s chill approaching, it’s a natural time for reflection—and that includes taking stock of your financial and tax situation. The end of the year is closer than it seems, and a bit of preparation now can make a significant difference come tax season. Here are a few things to consider as the leaves fall: 1. Review Your Income and Deductions This is a good moment to check your income year-to-date and consider whether there are any deductions you can still take advantage of. Charitable donations or investment losses might help reduce your taxable income before year-end. 2. Maximise Super Concessional Contributions If you haven’t yet maxed out your superannuation concessional contributions, there’s still time. Remember unused cap amounts carry forward for 5 years and the 2019-20 unused cap amount will expire 30 June 2025. These contributions not only help secure your future but can also offer tax benefits now. 3. Organise Your Records Autumn’s slower pace is perfect for pulling together receipts, invoices, and financial documents. Getting organised now means less stress later when tax season begins in earnest. 4. Consider Tax-Loss Harvesting If you’ve had investments that underperformed, selling them before the end of the year to offset gains can be a strategic move. Consult with us today to see if this makes sense for you. 5. Plan Ahead Winter may bring holidays and downtime, but it's also a good window to consult with a tax professional. A quick meeting before year-end can reveal savings opportunities or help avoid surprises when you file. So, as the days grow shorter and frost begins to settle in, use this time to bring clarity and warmth to your finances.

Have you Thought About Where Your Business Will Be in 5 Years?

By Caroline Gillies • May 11, 2025
At Clear Vision Accountancy Group, we offer tailored services to support your long-term success—from strategic business planning to high-end tax administration. Whether you're aiming for growth, improved profitability, or a clearer direction, we're here to help you build a plan that gets results. If you're ready to map out the next five years with clarity and confidence, contact us today on (07) 4688 2500. Our 1-Page Business Plan will help you with: 1. Vision & Purpose Where are you headed, and why does it matter? What is the core purpose of your business? In five years, what positive impact will you have made on your customers, team, or community? What do you want your business to be recognised for within your industry? 2. Growth & Scale What does success look like, and how will you achieve it? What revenue, profit, or market position are you targeting? How many clients or customers do you want to serve—and in which markets? Are you planning to expand your offerings or enter new territories? 3. Team & Culture Who is helping you build it—and how? What does your ideal team look like in terms of structure, culture, and capabilities? How will you attract, retain, and develop top talent? What kind of leadership values and workplace environment will you foster? 4. Operations & Systems How will you deliver at scale—efficiently and reliably? What systems and workflows need to be in place to support sustainable growth? Which technologies or platforms will you implement to improve efficiency? How automated or streamlined do you want your business operations to become? 5. Brand & Customer Experience What do customers say about you—and why do they keep coming back? How will clients describe their experience with your business? What kind of reputation or brand presence will you be known for? What sets your business apart from the competition ?  Our Dream it. Plan it. Get it! will help you with: 1. Lifestyle & Personal Goals How does your business support the life you want to live? What level of involvement do you want in the day-to-day operations? What does ideal work-life balance look like for you? What personal or financial goals will your business help you achieve?