Bob’s business made $1.96M taxable income but had little to show for it in available cash. Unfortunately, this assessable income meant a hefty tax bill was looming and Bob had trouble understanding “where all this profit had gone”.

It’s a common scenario whereby profit on paper doesn’t necessarily equate to cash in your account. Paying down suppliers, old debts with the ATO, car and equipment repayments and money pulled out personally by the owners had all contributed to a cash flow scenario where the tax on last year’s profit seemed impossible to pay.

Working together we devised a cash flow budget to ensure money was set aside each month to cover upcoming liabilities. We monitored it monthly to stay on track and reviewed expenditure to determine any cost savings. Bob was running a pretty tight ship so there was little to tweak in terms of money going out so we shifted the focus to revenue. Strategies were put in place with key performance indicators (KPIs) to ensure Bob was meeting the revenue targets required to cover the tax bill and future ATO obligations.