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.

What Records to Keep for Your Rental Property

By Caroline Gillies • August 3, 2025
If you own a rental property or holiday home, keeping the right records is key to maximising your tax deductions and staying ATO-compliant. This week, we’re highlighting what the ATO expects you to keep when it comes to residential rental properties. Here’s a quick checklist of the documents you should hold onto: Purchase & Sale Documents – Contracts, settlement statements, and legal documents. Loan & Ownership Records – Loan statements, refinancing documents, land tax assessments. Rental Income – If you don’t have a rental statement you will need to document all rental income received, including bond money retained, insurance payouts, and any other reimbursements. Expenses & Repairs – Keep receipts and invoices for expenses like advertising for tenants, property agent fees, council rates, strata levies, repairs, maintenance, insurance, and interest on loans. Depreciation & Capital Works – Receipts for assets over $300, depreciation reports, and capital improvement records. Before and after photos of any capital works. Holiday Home Use – If your property is rented out part-time, you’ll need evidence of when it was genuinely available for rent (e.g. booking requests, advertising, availability calendars). How long to keep records: You’ll need to keep most records for at least 5 years after lodging your tax return, or longer if claiming capital works or carrying forward losses. Keeping detailed records ensures you claim everything you're entitled to—and makes things much easier in the event of an ATO audit.  Need help getting your documentation in order? Reach out to our team at Clear Vision Accountancy Group—we’re here to help. To read a more detailed list of items you need to keep for your rental property visit: Records for rental properties and holiday homes | Australian Taxation Office

How Much Do You Need to Make? Understanding Business Turnover

By Caroline Gillies • July 13, 2025
Running a business isn’t just about making sales — it’s about making enough sales to cover your costs and pay yourself what you deserve. But how do you figure out how much turnover (aka revenue) you actually need to make each month? Knowing this number helps you: Set realistic sales targets Price your products or services properly Know when to cut costs or increase margins Understand when your business is sustainable This isn’t just about numbers — it’s about clarity and control. Once you know your required turnover, you can stop guessing and start planning. Whether you’re a solopreneur, a growing startup, or a small business owner, this is the foundation of making your business work for you — not the other way around. We love numbers — seriously. And we get that not everyone does. If you need help breaking things down in a way that’s simple, practical, and actually makes sense (even if numbers aren’t your thing), call Clear Vision Accountancy Group today on 4688 2500.

12% Superannuation Guarantee - 1 July 2025

By Caroline Gillies • June 22, 2025
From 1 July 2025, the Superannuation Guarantee (SG) rate in Australia will increase to 12%. This means employers will be legally required to contribute at least 12% of an eligible employee's ordinary time earnings to their superannuation fund. This increase is the final step in a legislated rise from 9.5% in 2021 to 12% by 2025, aimed at boosting retirement savings for Australian workers. If you use Xero for payroll, the SG rate should automatically update in the system. However, we recommend you double-check your payroll settings to ensure everything is correct. If you’re unsure or need assistance, please contact your bookkeeper or get in touch with us at: Clear Vision Accountancy Group (07) 4688 2500 We’re here to help you stay compliant and avoid any costly errors.