Running a business in Australia is tough. Super payments, payroll deadlines, BAS reporting—they all come at you at once when cash dries up.
This guide is for small business owners who are feeling the squeeze. Whether you’re missing invoices or barely making payroll, it’s not the end—but you need to act now.
Get Clarity on the Real Numbers
Cash flow issues feel worse when you’re in the dark. That’s why your first step is clarity.
Open your accounts. Make sure your coding and reconciliation are done. Then look at your profit and loss statement. Check your bank balance. See what’s actually happening.
A client recently told me, “We’re broke!” but we found $12,000 in overdue invoices. The money was there—they just hadn’t chased it.
Trading While Insolvent: A Warning to Company Directors
If you’re trading through a company, you need to be aware of the laws around insolvency.
Trading insolvent means your company can’t pay its debts when they’re due. And that’s not just stressful—it’s illegal.
As a director, you can be held personally liable, especially for unpaid tax or super. We’ve seen business owners end up with personal ATO debt they never expected.
Spot the red flags early. Are you struggling with payroll? Overdue on supplier payments? Relying on ATO payment plans month after month?
If any of this sounds familiar, stop guessing and speak to your accountant. You can book a confidential meeting with us here.
Step One: Collect What You’re Owed
Follow Up Outstanding Invoices
This is the fastest way to ease pressure. Don’t send reminders. Pick up the phone.
Ask for a payment date and write it down. Follow up until the money is in the bank.
Offer incentives for quick payment if needed. 5% off now is better than 100% never paid.
Step Two: Cut the Leaks in Your Business
Review Your Expenses Line-by-Line
This is where the hard choices come in. Be ruthless.
Cancel unused software. Pause subscriptions. Cut overtime or reduce shifts if needed.
This doesn’t have to be forever—just until you’re stable again.
Step Three: Review Your Director’s Wages
Directors Loans and Living Lean
If you’re paying yourself first, it might be time to reconsider. You should be paid last.
That’s the reality of being an entrepreneur. But smart management makes that sacrifice worth it.
Set your wage based on what’s sustainable. We explain how to do this in our related post: How to Set Your Owner’s Wage.
Step Four: Unlock Cash in Inventory
Convert Stock to Working Capital
Got products sitting on shelves? Time to move them.
Run a clearance sale. Offer bundles. Create urgency and bring in cash.
Cash in the bank is better than unsold stock in the storeroom.
Step Five: Don’t Ignore the ATO
Payment Arrangements Can Save You
If you owe tax or super, don’t go silent. That’s when penalties hit hard.
Talk to your accountant. Or apply for a payment plan directly on the ATO website.
We can help you lodge on time, even if you can’t pay straight away. But this should not be an ongoing strategy.
Step Six: Talk to Your Team
Transparency Builds Loyalty
Your team probably knows things are tight. So be honest.
Let them know what’s happening. Reassure them there’s a plan.
Good team members appreciate being included and usually want to help.
Step Seven: Check Your Pricing and Payment Terms
Are You Charging Enough?
I worked with a plumber who hadn’t increased prices in three years. His costs had gone up 30%.
A 10% price increase made all the difference. And no one complained.
Get Paid Faster
If you wait until the end of the month to invoice, stop. Invoice upfront or on completion.
And shorten your payment terms. You’re not a bank.
Step Eight: Borrowing Carefully
Smart Business Finance Options
Sometimes, short-term borrowing helps. But be cautious.
Talk to a reputable broker or your bank. Avoid high-interest loans or merchant cash advances.
Only borrow if you’ve got a solid plan to repay. Otherwise, it’s just digging a deeper hole.
Step Nine: Build a Buffer
Your Emergency Fund Is a Lifesaver
Once you’re through the worst of it, start putting aside a percentage of every invoice.
Your goal is six months of business and personal expenses in a separate account.
Even 5% of every payment adds up fast. Future-you will thank you.
Step Ten: Reset Your Owner’s Wage
Now that things are stabilising, revisit your wage.
It should reflect what your business can consistently afford on bad day. You plan, with your accountant, to take a bonus annually based on the business performance.
Bonus: Learn Everything with Our Small Business Course
Want to really take control of your business? We’ve created a straight-talking, no-fluff small business course that covers everything you need to know.
It’s designed to demystify the jargon and give you real-world tools. From tax and structure to payroll and pricing, it’s all in there.
If you’re a client, you can access it for just $95. That’s less than a single advisory session.
Check it out here and start building a business you understand and control.
Conclusion: You’re Not Alone—But You Need to Act Early
If you’re in a cash flow crunch, now you know what to do.
You’ve learned how to avoid trading insolvent, chase money fast, cut expenses, handle your own wages, and create a long-term safety net.
Most importantly? Don’t wait. The earlier you act, the more options you have.
Need Help Now?
Book a one-on-one meeting with our principal accountant Janelle Bartlett here.
Or download our free guide: Tax Guides.
We’re here to help you get through it—and come out stronger on the other side.
