Your bookkeeper warned you about cash flow — turning the warning into a plan

Your bookkeeper is often the first person to notice trouble brewing. They reconcile the bank feed, chase the invoices and line up the supplier payments, so they see the shape of the next few weeks long before the year-end accounts are drafted. When they say “cash is going to be tight”, it’s worth listening closely — and then asking the right follow-up questions.

Why bookkeepers spot cash squeezes early

Profit and cash are different things. The business.gov.au definition of working capital is simply the cash available for day-to-day expenses, and that’s exactly what your bookkeeper watches. A profitable business can still run short when:

• A big customer slows payment while your wages and rent stay the same
• You’ve bought stock ahead of a busy season
• A quarterly BAS, PAYG instalment or super payment falls due in the same week as payroll
• Growth means you’re paying for materials and labour weeks before invoicing

None of this shows up in last year’s tax return. It shows up in the reconciliations your bookkeeper does every week.

The one report to ask for: a 13-week cash forecast

Ask your bookkeeper to build a rolling forecast, week by week, for the next quarter. It should show:

1. Opening bank balance each week
2. Expected receipts — based on your debtors list and their real payment habits, not the invoice terms
3. Committed payments — wages, super, rent, loan repayments, BAS, suppliers
4. Closing balance each week

The lowest closing balance is the size of your gap. The week it turns positive again tells you how long you need cover. Those two numbers are the backbone of any sensible cash flow facility.

If your bookkeeper doesn’t usually prepare forecasts, the business.gov.au cash flow statement template is a good starting point, and many accounting packages have a forecasting view built in.

Gap or shortfall? Reading the forecast honestly

What the forecast shows	What it likely means	Sensible response
Dips, then recovers within weeks	Timing gap	Line of credit or short cash flow loan
Dips around tax dates each quarter	Tax timing	Set-aside account, ATO payment plan or short facility
Dips once for a large purchase	One-off investment	Term finance matched to the asset’s life
Keeps sliding with no recovery	Structural shortfall	Fix pricing, costs or debtors first

Borrowing to cover a structural shortfall only delays the problem and adds repayments. If the forecast never recovers, talk with your accountant about pricing, costs and collection before thinking about finance.

What finance fits a temporary gap?

For a trading business with a recovering forecast, the usual options are:

• A line of credit — draw what you need, repay as receipts arrive, draw again. Good for recurring dips.
• A short-term cash flow loan — a fixed amount repaid over months. Good for a single, defined gap.
• A property-secured facility — if the gap is large or the business has limited trading history but the owner holds property equity.

Facilities that rely on trading rather than property usually range from about $5k to $500k, and the lender sets the limit by looking at deposits and turnover. Larger needs, or files with credit blemishes, often work better with property security from $20,000 up to $5,000,000. The page on bank statements and unsecured lending explains how lenders read your account conduct.

What your bookkeeper can prepare for a lender

A cash flow lender will often ask for exactly the reports your bookkeeper already produces:

• Reconciled bank statements for the last six to twelve months
• Aged debtors report — who owes you, how much and how overdue (how lenders read it)
• Aged creditors report — who you owe and whether anything is stretched
• Year-to-date profit and loss
• The 13-week forecast itself

Our guide for bookkeepers preparing a loan file is written for them — feel free to forward it.

How to raise it with a lender without sounding alarmed

Lenders respond well to owners who see a gap coming and plan for it. Compare two openings:

• “We’re out of money and payroll is Thursday.”
• “Our bookkeeper’s forecast shows a low point of around $70k in five weeks, recovering by week ten when two large invoices are due. We’d like a facility to cover that window.”

The second owner gets a calmer, more useful conversation — and usually more options — because the need is defined and the exit is visible.

Questions to ask your bookkeeper this week

Before you act, a short conversation with your bookkeeper will sharpen the picture:

1. Which customers are paying later than they used to? One slow payer is a collection issue; several is a trend.
2. Which payments could move without penalty? Some suppliers will agree to a short extension if asked early.
3. When are the next tax-related payments due? BAS, PAYG instalments and super can cluster in the same fortnight.
4. Is anything in the forecast optimistic? Ask them to flag receipts that are hoped for rather than confirmed.
5. What would the low point look like if the biggest invoice paid a month late? That’s your buffer.

Their answers help you decide whether to tighten collections, renegotiate terms, arrange finance, or do a bit of each. Many owners find that a modest facility plus firmer debtor follow-up solves the problem without borrowing as much as they first feared.

Should your bookkeeper be on the call with the lender?

It often helps. Your bookkeeper can explain the forecast assumptions, why a particular customer pays slowly, or why the bank balance looks low at the end of every month. With your written permission, a lending specialist can direct those questions to them and keep you copied in. You remain the decision-maker; they simply save you translating the reports.

Act on the warning while you still have room

Your bookkeeper has given you a head start. Use it. Tell us about the gap in a 60-second enquiry — there’s no credit check to ask, your details go to one well-matched lender rather than a list, and a real specialist calls you back. Give us accurate figures, ideally straight from the forecast, so the first option you hear about actually fits. See what could bridge the gap.