Running Out of Cash? Here’s How Forecasting Can Save You!

Running Out of Cash? Here’s How Forecasting Can Save You

Running Out of Cash? Here’s How Forecasting Can Save You

Cash flow problems are one of the biggest challenges facing Australian small businesses today. Whether you’re a tradie, a startup founder, or running a family business, the stress of not knowing whether you can pay your bills next month can be overwhelming. But here’s the good news. With smart cash flow forecasting, you can take back control of your finances before things spiral out of hand.

Why Do So Many Businesses Run Out of Cash?

It’s not always about lack of profits. Many profitable businesses still go under due to poor cash flow management. You might have plenty of sales on the books, but if customers are slow to pay or your expenses hit all at once, your business can find itself in the red quickly.

Common cash flow killers:

  • Late-paying clients
  • Unplanned expenses
  • Seasonal dips in revenue
  • Overestimating future income
  • Poor inventory management

What Is Cash Flow Forecasting?

Cash flow forecasting is the process of predicting your business’s future cash position based on your income and expenses. It gives you a clear view of what’s coming in, what’s going out, and what your bank balance will look like weeks or months ahead.

With the right forecast in place, you can:

  • Plan for tax obligations and upcoming bills
  • Anticipate cash shortages before they happen
  • Make smarter investment and hiring decisions
  • Negotiate better terms with suppliers or lenders
  • Sleep easier at night knowing you’ve got a financial roadmap

Real Benefits for Business Owners

For many of our clients across Australia, forecasting has been a game changer. It’s not just about surviving, it’s about thriving. Whether you’re in hospitality, construction, retail or any other industry, having a tailored cash flow forecast can empower you to make confident, informed decisions.

How to Get Started with Forecasting

While there are plenty of DIY tools available, nothing beats the insight of working with a trusted accounting partner. A good accountant can build a custom forecast based on your specific business model, industry trends, and local conditions. Better yet, we can help you review it regularly and adjust course as needed.

Here’s what we typically include:

  • 3, 6, and 12-month projections
  • Scenario planning (best, worst, and expected cases)
  • Rolling updates to adapt to real-time performance
  • Guidance on budgeting, cost control, and payment cycles

Don’t Wait Until You’re Out of Options

If you’re feeling the pinch, now’s the time to act. A cash flow forecast isn’t just a financial tool, it’s a survival strategy. The sooner you get visibility over your future cash position, the more options you’ll have.

Reach out to our team at SKD Accountants today to book a free consultation. We’ll help you gain clarity, regain control, and make confident decisions to grow your business not just keep it alive.

Ready to take control of your cash flow?

Book a free 30-minute discovery call with our team. Let’s forecast your future — and make it bright.

 

GET IN TOUCH WITH US

Contact SKD Accountants today to find out how we can help you.

Doncaster Office:

Daniel Thong
Chartered Accountant
Director

Phone number

+61 434 285 409

E-mail address

daniel@skdaccountants.com.au


Address

69 Ayr Street
Doncaster VIC 3108

Keilor Downs Office:

Tony Thong
Chartered Accountant
Director

Phone number

+61 433 704 405

E-mail address

tony@skdaccountants.com.au


Address

16 Kavanagh Crescent
Keilor Downs VIC 3038

Cash Flow vs. Profit: Do You Need to Know the Difference?

Cash Flow vs. Profit: Do You Need to Know the Difference?

Spoiler alert: Yes, you absolutely need to know the difference.

Whether you’re a startup founder, a solo entrepreneur, or a small business owner wearing multiple hats, understanding your finances can be the difference between thriving and barely surviving. One of the most common financial misconceptions we see is the confusion between cash flow and profit. While both are crucial indicators of business health, they serve very different purposes and knowing how to interpret them could be what saves your business from a financial blindspot.

What is Profit?

Profit is what’s left after all your business expenses are subtracted from your revenue. It’s what we accountants call “the bottom line” for a reason.

There are two types of profit to know:

  • Gross Profit: Revenue minus the cost of goods sold (COGS).
  • Net Profit: What’s left after subtracting all expenses, including operating costs, interest, and taxes.

Profit tells you:

  • If your business is earning more than it spends over a period.
  • Your overall financial performance.
  • What’s reportable on your income statement and tax returns.

What is Cash Flow?

Cash flow, on the other hand, is about timing and movement. It tracks the actual inflow and outflow of cash in your business—what’s coming in and what’s going out at any given time.

There are three types of cash flow:

  • Operating cash flow: Cash generated from your core business activities.
  • Investing cash flow: Money spent or earned from investments (equipment, property, etc.).
  • Financing cash flow: Cash from loans, repayments, or equity funding.

Cash flow tells you:

  • If you have enough cash on hand to pay bills, salaries, or rent.
  • How well you’re managing short-term operations.
  • If you’re at risk of a cash crunch, even if you’re profitable on paper.

Profit Does Not Equal Cash Flow (And That’s a Big Deal)

Let’s say you land a $50,000 contract. You record it as revenue — yay, profit! But if that client doesn’t pay for 90 days, your profit report might look great while your bank account says otherwise.

Many profitable businesses fail because they run out of cash. Conversely, some businesses with thin profit margins stay afloat because they manage cash flow like pros.

Moral of the story: Profit is your scoreboard. Cash flow is your lifeline.

Why You Need to Monitor Both

If you’re only checking your profit and loss statement (P&L), you’re missing the full picture. Monitoring both can:

  • Help you avoid cash shortages and late payments.
  • Support smarter decisions on hiring, investing, or scaling.
  • Make tax planning and forecasting more accurate.
  • Impress investors or lenders with complete financial visibility.

Simple Tips to Improve Cash Flow and Profit Together

  • Invoice smarter: Set shorter payment terms and follow up promptly.
  • Cut unnecessary expenses: Review your recurring costs monthly.
  • Negotiate better supplier terms: Stretch out payables without straining relationships.
  • Forecast regularly: Don’t just react—anticipate.
  • Separate personal and business finances: It’s surprising how often this causes confusion.

Need Help Getting a Clear Picture of Your Business Finances?

As a business owner myself, I get it. It’s easy to get buried in day-to-day operations and lose sight of the bigger financial picture. At SKD Accountants, we specialise in helping entrepreneurs understand not just where their money goes, but how to make it work for them.

Want to see how cash flow and profit are working in your business? Book a free 30-minute discovery call today.

Doncaster Office:

Daniel Thong
Chartered Accountant
Director

Phone number

+61 434 285 409

E-mail address

daniel@skdaccountants.com.au


Address

69 Ayr Street
Doncaster VIC 3108

Keilor Downs Office:

Tony Thong
Chartered Accountant
Director

Phone number

+61 433 704 405

E-mail address

tony@skdaccountants.com.au


Address

16 Kavanagh Crescent
Keilor Downs VIC 3038

5 Crucial Tax Planning Topics to Discuss With Your Accountant Before 30 June 2025

5 Crucial Tax Planning Topics to Discuss With Your Accountant Before 30 June 2025

As we approach the end of the 2024–2025 financial year, now is the perfect time to sit down with your accountant and review your tax planning strategy. Proactive tax planning can help you reduce your tax liability, maximise deductions, and improve your overall financial health.

Here are five key topics you should be discussing with your accountant before 30 June 2025 to ensure you’re making the most of every opportunity.

  1. Maximising Deductions and Instant Asset Write-Offs

The Australian Taxation Office (ATO) frequently updates thresholds and eligibility for instant asset write-offs. The current threshold for the instant asset write off for the year ended 30 June 2025 is $20,000. If your business qualifies, purchasing eligible assets before 30 June 2025 could significantly reduce your taxable income.

Ask your accountant:

  • What expenses and assets can I claim this year?
  • Is it beneficial to bring forward any purchases?
  1. Superannuation Contributions and Caps

Contributing to your superannuation is one of the most tax-effective strategies available. Before EOFY, it’s important to check if you’ve maximised your concessional (tax-deductible) and non-concessional contributions within the ATO limits.

Ask your accountant:

  • How much can I contribute without exceeding the cap?
  • Can I use the catch-up contribution rules from previous years?
  1. Reviewing Business Structure for Tax Efficiency

Your current business structure may no longer be serving your best interests. Whether you operate as a sole trader, partnership, trust, or company, it’s essential to assess if your structure is still the most tax-efficient as your business grows.

Ask your accountant:

  • Should I consider restructuring?
  • What are the tax implications of my current structure?
  1. Managing Capital Gains and Losses

If you’ve sold or plan to sell assets like shares, property, or crypto during the year, your accountant can help you calculate capital gains tax (CGT) and explore strategies to offset gains with losses.

Ask your accountant:

  • How can I minimise my capital gains tax?
  • Are there any timing strategies I should consider?
  1. Tax Planning for Directors, Shareholders and High-Income Earners

If you’re a business owner or high-income earner, strategic planning can reduce your personal tax burden. Dividend planning, trust distributions, and income splitting can all play a role.

Ask your accountant:

  • Are there better ways to distribute profits?
  • Can I minimise tax through trusts or family entities?

Smart tax planning isn’t just about compliance. It’s about forward thinking. By engaging with your accountant well before the 30 June 2025 deadline, you can unlock meaningful tax savings and plan more confidently for the year ahead.

Need help with EOFY tax planning?
Contact SKD Accountants today and let’s create a tailored tax strategy for you or your business.

GET IN TOUCH WITH US

Contact SKD Accountants today to find out how we can help you.

Doncaster Office:

Daniel Thong
Chartered Accountant
Director

Phone number

+61 434 285 409

E-mail address

daniel@skdaccountants.com.au


Address

69 Ayr Street
Doncaster VIC 3108

Keilor Downs Office:

Tony Thong
Chartered Accountant
Director

Phone number

+61 433 704 405

E-mail address

tony@skdaccountants.com.au


Address

16 Kavanagh Crescent
Keilor Downs VIC 3038