Strong financial management is one of the most important foundations of a healthy business. Yet many business owners, especially small and growing businesses struggle to stay ahead of their cashflow, tax obligations and compliance requirements. The problem is often not profitability, but the timing of when money comes in versus when the ATO, suppliers, or employees must be paid.
Here are practical strategies to keep your finances in order, avoid unnecessary stress, and ensure your business remains compliant throughout the year.
1. Set Aside Money for GST, Tax and Super Every Single Time
One of the most common issues for small businesses is accidentally spending money that legally belongs to the ATO. Whenever you receive income, set aside the following amounts into separate bank accounts:
- GST: 10% of GST-inclusive sales
- PAYG Income Tax (for sole traders): A percentage based on your estimated tax rate
- Company Tax: 25% of taxable profit (for most base rate entities)
- Superannuation for Employees: 12% of ordinary time earnings
Keeping these funds separate ensures you are not caught out at BAS or tax time. Treat this money as untouchable, it is not business income, even though it passes through your account.
2. Use a Dedicated “ATO Savings Account”
A dedicated ATO account helps maintain discipline and prevents accidental overspending. Each time you receive payment from a customer, immediately transfer the tax amounts to this account. The goal is to make your operating account reflect only what is truly available for spending.
This simple habit helps cover:
- BAS liabilities
- Income tax
- Superannuation
- PAYG withholding
When the ATO deadlines arrive, you will already have the cash on hand.
3. Keep Your Bookkeeping Up to Date
Accurate, up-to-date bookkeeping helps you understand your true financial position. Delays cause major issues, missed deductions, incorrect BAS lodgements, unexpected tax bills, and flawed decision making.
Stay on track by ensuring:
- Bank accounts are reconciled weekly
- Invoices and bills are entered promptly
- Payroll is processed correctly and on time
- Reports such as Aged Debtors and Aged Creditors are reviewed monthly
Cloud accounting platforms like Xero make this process significantly easier.
4. Understand Your Cashflow Cycles
A business can be profitable on paper yet struggle to pay bills if its cashflow is poorly managed. Monitor:
- When customers typically pay
- When major expenses fall due
- Seasonal peaks and dips
- Loan repayments and interest
- Upcoming ATO obligations
Create a rolling 12-month cashflow forecast. This helps you anticipate tough months and plan accordingly, rather than reacting at the last minute.
5. Pay Superannuation Frequently Instead of Quarterly
From 1 July 2026, employers will be required to pay super weekly.
However, many businesses are already choosing to pay super monthly to keep cashflow steady and avoid large quarterly outflows.
More frequent super payments also mean:
- Easier reconciliation
- Reduced risk of missing deadlines
- Better employee transparency
- Less financial pressure at the end of each quarter
6. Avoid Mixing Business and Personal Spending
Blurred spending is one of the biggest causes of disorganised finances.
Keeping business and personal transactions separate ensures accurate accounting and helps avoid:
- Overstating business expenses
- Missing deductible items
- Drawing excessive cash from the business without planning
Use separate accounts and cards to maintain clarity.
7. Review Your Financial Reports Regularly
Successful businesses don’t wait until the end of the year to find out how they’re performing. Review the following monthly:
- Profit and Loss Statement
- Balance Sheet
- Cashflow Report
- Aged Receivables & Payables
- GST and PAYG Withholding Payables
Regular reviews help you identify issues early and correct them before they become expensive.
8. Seek Professional Advice Before Making Major Decisions
Whether it is hiring staff, purchasing equipment, taking on a loan, or expanding operations, professional advice can help you understand:
- Tax implications
- Cashflow impact
- Financing requirements
- Risks and benefits
Good advice can save time, money and future complications.
Final Thoughts
Staying on top of your business finances is about consistency, planning and discipline. By setting aside funds for compliance, maintaining accurate records, and reviewing your numbers regularly, your business remains in a strong financial position ready for growth, investment and long-term success.
If you need help with bookkeeping, BAS lodgements, tax planning or financial forecasting, professional support can make the process smoother and ensure your business stays compliant throughout the year.