I find myself regularly talking to business owners about simple ways they can manage their money to ensure they can pay their business obligations. The advice I give is very basic but the feedback we get is that is significantly reduces stress levels and means business have the funds to pay bills as they come due. So here are my gems of wisdom:
- Have at least two business bank accounts. The first is to be used for day to day operations. The second is an on-line savings account.
- After each payroll is run and net pays made to staff, the remaining liability for Super, Long Service Leave and PAYG Withholding is transferred to the savings account. While these obligations are usually only paid quarterly the funds are no longer available for other business expenses.
- At least monthly a business should review its GST obligations and transfer an amount to cover this to the savings account. Again, this payment will not be due until the end of each quarter but funds are set aside.
- Another option is to average out the above total costs and set up a weekly transfer to the savings account for these.
By adopting these few simple steps at the end of each quarter when a business is required to pay Super and lodge and pay its Business Activity Statement funds are available to do so immediately. No stress then involved in looking for large lump sums of money.
If you have any other simple ideas you would like to share with us or would like to chat with us further about how we can help you please feel free to give us a call.
Smart Business Guardian