Business Basics: MYOB’s 10 tips to improve cashflow

27 October 2021

You can run a profitable business, but unless you have cashflow under control the odds are against you. Here are some simple accounting tips to get it right.


According to Dun and Bradstreet, 90 percent of small business failures are caused by poor cashflow management.


As the world is undergoing challenging times, it’s never been more crucial to be on top of cashflow and business performance.


The MYOB Business Monitor, which surveys local business owners, regularly finds cashflow listed as a chief concern or cause of stress for around a third of respondents.


Want to make sure you’re not just another statistic? Here are ten tips to set you on the course for improved cashflow.


1. Invest in a reputable online accounting package

With a reputable online accounting package, you’ll be on your way to better manage your cashflow from the outset.


You’ll have a handle on your accounting information and will can make more informed decisions around your finances.


MYOB online accounting will provide just that.


You’ll be able to automate your invoicing to your clients and set the payment terms that suit your business.


You can even see when your clients receive, open and pay their invoices. And, you can email regular statements as reminders as well.


As a result, you’ll spend less time on debtor management and get paid faster.


2. Debtor management in a mobile world

With your accounting software is in tow, you can better manage your debtors and cashflow with the use of mobile invoicing features in your accounting software.


There’s no reason why you can’t be creating an invoice on your phone or tablet before you’ve even left a client consultation or provided a service.


You can also process credit card or EFTPOS payments on the spot whilst your accounting software is automatically updated to save you time.


3. Creditor management

On the other side of the equation, businesses should manage the timing of payments of creditors too.


If you’re paying suppliers too quickly while clients drag out paying your invoices, then you will put your business under cashflow pressure.


That’s not to say you need to withhold timely payment of creditors, but rather keeping a closer eye on how you spend your business’s money.


With online accounting software, not only can you receive and pay bills, these days you can even capture and upload physical receipts via a mobile phone app — all of which allows you to get a much clearer idea of what you’re spending and what you owe.


4. Prepare a cashflow forecast

A cashflow forecast is a deeper dive into your business’s incoming and outgoing funds over a particular time frame.


It will help you plan for those looming bills and other planned expenditure and plan for the timing of the outflows so that don’t overspend when cash is tight, and you stay in business.


For example, a lot of businesses will go out and buy a company car when they’re flush with cash – without taking into account coming lean times.


Cashflow forecasts show the cash fluctuations caused by such actions.


Software like MYOB allow you to setup a cashflow forecast to help you better navigate performance.


5. Create a budget

Budgets are such an important part of running a successful business.


They’re the road map for your finances.


Budgets are an estimate of how your business will perform in the coming year.


It’s so easy to quickly lose control of your finances without a budget, and they set you on the path of achieving your goals by helping you make smarter decisions around your finances.


At times, you may need to adjust your budget as your business changes as an unexpected bill creeps in.


Budgets can be made easy with the use of your MYOB AccountRight and Essentials.


They’re very easy to set up, use and manage. They also allow you to compare past years and compare actuals too.


By monitoring your cashflow and reviewing your budgets regularly, you should be able to identify any issues early and making plans to avoid any tough times.


6. Review and update cashflow budgets

During challenging times, it is wise to keep your finger on the pulse so you can better manage any impact a crisis or slowdown may have on your business cashflow.


By reviewing and regularly updating your cashflow budgets or forecasts you are better placed to make changes before issues become major problems.


Therefore, using a cashflow tool to help you will make it so much easier to stay on top of your business.


7. Reduce overheads

Business owners should always look for ways to reduce their overheads, so they maintain a healthy financial position.


Savings can be made by reducing marketing and advertising budget, minimising spend on consumables and any other non-essential costs.


Reducing labour costs with minimal disruption to the business is also a good way to preserve cash. Consider reducing contract hours and distributing work to permanent staff (provided it is within the realm of your industry award).


8. Maintain stock levels

Cash is consumed if a business buys too much stock – so by keeping the right amount of stock on the shelves, cash is released to be used in other areas.


It’s better to buy frequently and less, to keep the cash in the business.


There are many additional apps that will help your business to maintain the optimal levels and avoid over ordering.


9. Seek other revenue streams

During times of revue decline it is important to evaluate how you can continue to trade by seeking alternative revenue streams. Pivoting your business can be crucial to your survival.


During the pandemic we saw many businesses pivot and create new revenue streams which helped them survive. By opting for online options and staying current will help you to drive more sales.


10. Go app crazy

Speaking of apps, there are a raft of apps available to complement accounting software such as MYOB.


These apps can automate the way you run your business so that you have more time to make sales.


Products such as EzyCollect (debtor management tool) and Calxa (cashflow and budgeting tool) you are armed with all that is required to keep you on top of it all and run your business more efficiently.

The art of delegation

11 August 2025
How often do you get to the end of a working day and wonder where the time went? Perhaps you never got to item 3 (or even item 1!!) on your to-do list. How can you solve this problem without working longer hours? The answer is very simple, but the art in the solution is where the gold is. The answer to free up time is to delegate more – either to existing team members, new people you recruit, or externally to outside contractors. However, if delegation were that easy, everyone would be doing it now, right? So, what is the art of delegation? We say art, because delegation is not an exact science; different approaches are needed depending on who the ‘delegate’ is. Time and effort are required to effectively pass on tasks to others. Often, the time the delegator needs to put in initially is greater than if they did the work themselves – that’s why so many people don’t delegate. The view that ‘it’s quicker for you to do it yourself’ holds you trapped and unable to be more productive and effective yourself. It also stops others from developing better ways to do things than you already know, i.e. if you teach them your way, then they can master that AND add their own value – two minds being better than one. Here are some essential principles to apply to help you to delegate (as opposed to abdicate!): Delegation Assess the task, issue to the right person and support - helps build trust and respect Be specific and crystal clear for greater communication Request they repeat back instructions, so you know you were understood, enabling higher productivity Set a time frame and request clarification that the task has been achieved, ensuring jobs are completed on time and are profitable Both parties to review - opens the door for future work Abdication Issue tasks to anyone and forget about it - shows distrust and a lack of respect Giving unclear and little information results in poor communication Don’t ask if you were understood - results in low productivity Don’t set a time frame – it can mean jobs are delayed and over budget Different expectations can result in disgruntled clients No review results in no future work Delegation is a skill to be learned; applying these principles consistently will ensure long-term success. “No person will make a great business who wants to do it all himself or get all the credit” – Andrew Carnagie Action list: Which tasks am I currently doing that I could delegate to others? What can I do with the time I free up? Who are the best people for me to delegate these to? (Make sure they want to do these as part of their career development). What is the best way to document what is expected and how it should be done? What support and review process is needed to ensure success?

Work vehicles? Stay on top of tax with logbooks

11 August 2025
Logbooks are useful records of business expenses relating to work vehicles and this is important when calculating what tax deductions you can claim. Depending on your business entity type, different tax rules apply when you use motor vehicles to earn income, and you might use a logbook to track expenses in different ways. Sole traders and partnerships can claim income tax deductions for motor vehicle expenses if the vehicle is used to help earn income for the business. If you don’t use the vehicle exclusively for business, you can’t claim 100% of vehicle expenses. You need to work out the business use of the motor vehicle to calculate what deduction you can claim. You can do this either by using a logbook to track actual costs or using a logbook over a test period to establish the average business usage. Companies are a bit different. Where company vehicles are used partly to earn income and partly for private use, vehicle costs associated with private use are liable for FBT. Companies can use logbooks to keep track of work-related costs and show either that the vehicles are work-related vehicles which don’t attract FBT where used for work purposes only, or that FBT is accounted for correctly where there is some private use of other vehicles. The logbook becomes a record of work-related use and of private use subject to FBT. Where a company restricts private use of the vehicle, a logbook is used as evidence that employees have complied with the restriction. Whatever type of business structure you have, we can advise you on keeping good records and understanding what you can claim.

Changes to KiwiSaver: How to get your business ready

11 August 2025
Major changes to KiwiSaver were announced in Budget 2025. The KiwiSaver voluntary savings scheme is aimed at helping New Zealand workers save for retirement or buy a first house. But with the rising cost of living, action was needed to make KiwiSaver fit for purpose and more fiscally sustainable as a savings scheme. How will these changes affect your employees and your small business? Let’s take a look at the details of these KiwiSaver changes. Changes affecting your employees First off, let’s outline how the initial changes announced in Budget 2025 will affect your employees and other Kiwi workers: Since 1 July 2025: Younger workers will qualify for government contributions: People aged 16 and 17 will qualify for government contributions, so long as they meet other eligibility requirements. Prior to 1 July 2025, members must be 18 or older to qualify. Government contributions to halve: The government KiwiSaver contribution will halve, reducing the maximum government contribution from $521.43 to $260.72 each year. High earners to lose government contributions: People who earn more than $180,000 of taxable income in a year will no longer qualify for government contributions. No change to 2025 government contributions: There’ll be no change to government contributions for the year ending 30 June 2025. These will be paid in July and August at the current government contribution rate. Changes affecting your small business Next, let’s lay out the KiwiSaver changes that will directly affect your business: From 1 April 2026: Employer contributions will rise to 3.5%: From April 2026, the default KiwiSaver contribution rates for both employers and employees will rise to 3.5% – up from 3%. Employees can choose to remain contributing at 3%: Employees who are members of the KiwiSaver scheme will be able keep their contributions at the current rate. They can apply for a temporary rate reduction from 1 February 2026, if they want to continue contributing at 3% from 1 April 2026. Employers can match the rate reduction: As an employer, you’ll be able to match your employee’s temporary rate reduction. Once your employee moves to a higher contribution rate, you’ll need to increase your employer contributions to the default 3.5% rate. Inland Revenue will notify you of this change. Younger workers will qualify for KiwiSaver contributions: People aged 16 and 17 will qualify for employer contributions. If they contribute to KiwiSaver from their wages, you will need to start making employer contributions. From 1 April 2028, the default contribution rates for employers and employees will rise again to 4% (up from 3.5%). Getting ready for the KiwiSaver changes These amendments to KiwiSaver could have a significant impact for your small business. Increased employer contributions will increase your payroll costs and stretch your cashflow, as will making contributions for younger workers in the 16 to 17-year-old age bracket. You'll also need to update your payroll software and processes, to ensure you’re making the correct contributions for the right people, at the right rates. 
SHOW MORE

To discuss all your account matters please call us on 09 438 1001