Credit, EFTPOS, PayWave, Stripe, PayPal, direct credit, direct debit… oh yeah, and old fashioned cash! In this fast paced, bazillion bank transactions world, you’ve probably got money going in and out, via all different methods. Customers might owe you for goods purchased a week or month ago. You might need to pay a supplier in 30 days and then the wages are due weekly – the TIMING is all over the place. And until you have a nice little nest egg built up, it can be a bit of a juggle.

So, how do you move your business finances from chaos to calm? Here’s my top tips to nail your cash flow (and remove a bit of stress at the same time!)



Grab some paper or use a spreadsheet and calculate the four below categories of outgoing money:



This covers all your operating expenses, basically all the stuff that keeps the business running in the background:

  • If you pay wages weekly, times that by 4 to get to a monthly figure.
  • Any ‘owner drawings’ (wages you pay yourself not others), work this out as a monthly figure also.
  • Other expenses such as website, office, phone etc – but not the cost of buying in products or packaging.

So, what’s the number? Essentially this is your baseline cash flow figure. You must earn this on top of your cost for products to sell otherwise you can’t pay for the business to run in the background. Keep this in your business account.


Think about often you need to buy in stock to make or re-sell your awesome product. Remember to include:

  • What is it packaged in?
  • How it is sent?

These direct costs need to be added up to get to a monthly figure. If you order items every three months, then break this down to a monthly figure (some items and timeframes will need to be estimates).

If you provide a service, add up what it costs to provide that service per month. Do you purchase any items that are used or given away in that service?

Between category 1 and 2, all your “ordinary business-y costs” should be captured.



If you have bookkeeping system, you should be all good with these figures. Tax can be sometimes approximated at 30% of your sales figure, GST (depending on what you sell may be 1/11 of gross sales) and your superannuation account in your bookkeeping system will let you know what the average superannuation expense is. If you don’t know how or where to get these figures, it’s time to consult your past tax return and Business Activity Statements (BAS), or approach your bookkeeper or tax accountant to get these figures right. These items generally occur quarterly, or depending on your business may be monthly or annually, but work these out as a monthly figure.



This should include any unexpected items that have popped up throughout the last year (or in the future year) and any planned investment in new products or services. Are there any extraordinary items you’re expecting to incur? Add these items up, then divide them by 12 to get the monthly figure.

So here you are, four overarching categories of your business expenses. If you have trouble working out any of these expense categories, seek help from a friend that goods with numbers or even a professional! These are critical numbers to know and understand, the make up the basis of your business expenses.

But how are you going to compensate for the different timings of all these? In a similar way to personal cash flow management, by splitting these amounts into different bank accounts.



Lots of businesses have two bank accounts, their basic business account and a tax account. This way the tax money doesn’t get spent on anything else like research into a new product or extra owner drawings (remember, that’s what you pay yourself if you’re a sole trader). But at times, this doesn’t quite work as business owners can’t see what the balance of their bank account is truly showing them.

When there is excess money at the end of the month, is that profit or a bill that hasn’t been paid yet? Or will some of it need to go to purchasing more stock? See where I’m going here?

Every business needs to look at how they uniquely require the bank accounts to be split, particularly when in the beginning there may not be a lot of spare cash around. Some options include:

  • Option 1– one account for any transactions regularly in the month, another for longer-term bills and large purchases that are expected and a final account for super and tax
  • Option 2– one account for each of the categories above i.e. four bank accounts in total
  • Option 3– one main business account, another account for super, tax and GST and a final account for keeping stock repurchasing separate from ordinary running costs. The idea here would be to replenish this account when sales are made. An example of this is when you sell an item for $20 and you know that it cost $10 to make or buy. You need to move $10 to your ‘stock repurchase’ account, keeping funds aside for when you need to order replacement stock

Creating a separate account for purchasing new stock can take some additional time – calculating how much was sold, cost price of sold items and transferring funds. However, I’ve found that investment of your time upfront is rewarded when it’s time to order more stock in and you’ve got the money ready to go – particularly if you need to place a large order!

The options on how to split the business cash up, is endless! But with a bit of tinkering, each business can find them right system for them. And if you’re business experiences seasonality affecting your sales – for example you sell more in December and January is quiet, then this needs to be taken into consideration.


Still having cash flow issues?

If you complete this exercise and you’re still having trouble paying your bills and managing your cash flow, then it’s no longer a TIMING issue. The hard truth? There is a good chance you are spending more than you’re earning.

One way to check this is to add up your expenses (money out) and owner drawings (the cash you take out for yourself) over a set period, say 3 or 6 months. Then add up your income (money in) over the same period. If expenses are more than income… bingo! That’s your problem. You need a new strategy to sell more, increase your prices or reduce your expenses.

Crunching these numbers can feel a little daunting, no wonder, it’s your livelihood were talking about here. But on that note, you can’t leave it any longer to sort this stuff out, a small adjustment today could be a big investment in tomorrow!