If there’s one thing that causes more stress for business owners than tax…
it’s cash flow.
You can be profitable on paper and still feel like you’re constantly chasing money, juggling bills or worrying about what’s coming in next week.
And as EOFY approaches, that pressure often increases.
- BAS payments are due
- tax obligations are building
- super needs to be paid
- expenses stack up
The reality is simple:
👉 Cash flow is what keeps your business alive.
The good news is you don’t need complicated systems to fix it.
In this guide, we’ll walk through simple, practical strategies that small businesses in Penrith and across Western Sydney can use right now to improve cash flow before 30 June.
Why Cash Flow Gets Worse Before EOFY
Most businesses feel tighter heading into EOFY for a few reasons:
1. Tax liabilities start building
Even if you haven’t paid them yet, your:
- income tax
- BAS
- PAYG
- super
are accumulating.
2. Expenses increase
Many businesses spend more before EOFY to:
- reduce tax
- upgrade equipment
- bring forward deductions
But if this isn’t planned properly, it can drain cash.
3. Clients slow down payments
Some businesses delay paying invoices as they manage their own EOFY position.
4. Poor systems get exposed
If your invoicing, bookkeeping or pricing isn’t strong, EOFY magnifies the problem.
The Key Principle: Profit Doesn’t Equal Cash
This is one of the biggest misconceptions.
You can:
- make $200,000 profit
- but still struggle to pay bills
Why?
Because cash is affected by:
- timing of payments
- outstanding invoices
- stock purchases
- loan repayments
- tax obligations
That’s why improving cash flow requires active management, not just waiting for income.
10 Simple Ways to Improve Cash Flow Before EOFY
Let’s break this down into practical actions you can take immediately.
1. Get Paid Faster (This Is the Biggest Lever)
The fastest way to improve cash flow is simple:
👉 Bring money in sooner.
You can do this by:
- reducing payment terms (e.g. 14 days instead of 30)
- sending invoices immediately
- using automated reminders
- offering small early-payment incentives
Even shaving 7 days off your receivables can dramatically improve cash flow.
2. Follow Up Outstanding Invoices
Most businesses have money sitting in unpaid invoices.
Don’t assume clients will just pay.
Set a simple process:
- reminder at 7 days
- reminder at due date
- follow-up call at 14 days
This alone can unlock thousands in cash.
3. Review Your Pricing
If your margins are too tight, cash flow will always feel strained.
Ask yourself:
- have costs increased?
- are you undercharging?
- are you discounting too often?
Even a 5–10% price increase can make a big difference.
4. Delay Non-Essential Spending
EOFY is a time to be strategic — not reckless.
Before spending, ask:
👉 “Will this improve my cash position or just reduce tax?”
Sometimes holding onto cash is more valuable than chasing a deduction.
5. Use the Instant Asset Write-Off Carefully
Yes, it reduces tax.
But remember:
👉 It still requires cash upfront.
Only buy assets if:
- you actually need them
- they improve productivity
- you can afford them
6. Reduce Unnecessary Subscriptions
Most businesses are paying for:
- unused software
- duplicated tools
- outdated services
Review your expenses and cut what you don’t need.
7. Improve Your Stock Management
If you hold stock:
- don’t over-order
- clear slow-moving items
- reduce excess inventory
Stock ties up cash.
8. Set Aside Tax Money Now
One of the biggest cash flow shocks is tax.
Avoid this by setting aside:
- GST
- PAYG
- income tax
as you go.
A simple rule:
👉 Put aside 25–30% of profit regularly.
9. Use Payment Plans Strategically
If needed, the ATO allows payment plans.
But don’t rely on them long-term.
Remember:
- interest is no longer deductible
- it adds cost
- it impacts future cash flow
Use them as a short-term tool, not a habit.
10. Get Clear Visibility on Your Numbers
If you don’t know:
- what’s coming in
- what’s going out
- what’s due
you can’t manage cash flow.
This is where proper bookkeeping becomes critical.
The Biggest Cash Flow Mistakes to Avoid
Here are the most common mistakes we see:
- waiting too long to invoice
- mixing personal and business money
- ignoring overdue invoices
- spending just to reduce tax
- not planning for BAS and tax
- poor record keeping
Avoiding these alone puts you ahead of most businesses.
How Cash Flow Ties Into EOFY Tax Planning
Cash flow and tax planning go hand in hand.
For example:
- buying assets reduces tax but impacts cash
- deferring income improves cash but affects tax
- prepaying expenses changes both
This is why you need to balance both — not just focus on one.
How Carmody Accounting Helps Improve Cash Flow
At Carmody Accounting, we don’t just look at your tax return.
We help you:
- understand your numbers
- build simple cash flow systems
- forecast upcoming obligations
- improve invoicing and payment cycles
- align tax planning with cash flow
- reduce financial stress
We focus on practical advice that actually works in real businesses.
FAQ
How can I improve cash flow quickly?
Get paid faster, follow up invoices and reduce unnecessary spending.
Why is cash flow worse before EOFY?
Because tax liabilities increase, expenses rise and payments slow down.
Should I spend money to reduce tax?
Only if it makes sense for your business — not just for the deduction.