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Checklist: Managing business finances

Basic steps to pay your staff on time, maintain cash flow and meet all your tax obligations

On this page

  • Financial reporting and bookkeeping to maintain cash flow and meet profit targets
  • Supplier payments and customer invoicing 
  • Wage calculations and employer obligations

Use our templates to know your financial position, profit and loss and cash flow forecast and help you stay in control of your business finances. Know your break even point, profit margin and markup to avoid losing money on sales.

Financial statements template (XLSX 301.88 KB)XLSX icon

Cashflow forecasting template (XLSX 78.26 KB)XLSX icon

Financial policy and procedure manual template (DOC 191.5 KB)DOC icon

Bookkeeping and budgeting basics

Running a business includes keeping up with your bookkeeping and financial reporting. To stay up-to-date:

  1. set up a bookkeeping system. This can be as simple as a record keeping book from the newsagents, or purpose-built accounting software e.g. Quicken or MYOB. Keep your entries up to date to know the exact state of your finances
  2. use the checklist on business records and how long to keep them, including financial and employment records.
  3. find out if you need to register, report and pay GST
  4. talk to your accountant regularly. An accountant who regularly checks your finances will help detect potential problems and provide suggestions for ways to improve your business
  5. use the Financial policies and procedures manual template and modify for your business
  6. budget and refinance your business if your reporting shows you are continually reliant on overdraft or other financing facilities. Use the financial statement template to produce your cash flow statement.
  7. have a projected cash flow for the next 12 months to tell you if your business is tracking for growth or losing money. Anticipating when and how much money is coming in and going out is critical to maintaining a positive cash flow
  8. create a budget to enable the planned financial operation of the business to be measured against the forecast
  9. increase your income by planning more strategically to grow your business.

Stock, supplier and customer basics 

Maintaining your cash flow and growing your profits requires you to manage customer orders and supplier payments. To do this:

  1. keep up with your supplier payments. Owing other businesses and the tax office money is one of the first signs your business does not have a strong cash flow. Manage your cash flow by completing a cash flow forecast statement to make sure you have money to pay your suppliers on time.
  2. manage your customer debt. If your customers owe you money, do you know how much is owed and how overdue the payments are? If your customers owe you money which is outside of your credit terms, you need to act swiftly to collect this money.
  3. know your break even point, gross profit and profit margin figures to price your goods and services to cover your total cost of producing a product or service. These figures are essential to charge enough to cover costs and make a reasonable profit. Calculate these figures by using our financial statements template.
  4. review and then increase or decrease product and service costs. Your cost structure should not be set in concrete. Profitable businesses have regular reviews and make allowance for rising costs or sales dips.

Sales and marketing basics

To promote your business to new and existing customers:

  • don't just compete on price. Use promotions and offers other than sales and discounts. If you have many competitors and your point of difference is being one of the cheapest, your margins will always be slim and eventually someone will undercut you. Work on creating value-added points of difference that you can advertise
  • benchmark your business against competitors to help you plan and implement changes to boost your business performance
  • find out how to improve your sales by having a good understanding of your customers
  • assess your marketing campaign by conducting market research to find out where your sales techniques and market reach can be improved

Staffing and wage basics

Sole trader wages

To pay yourself wages as a sole trader it should come from the sales revenue you've made after you've taken out all your expenses.

Calculate your net margin (which is the sales dollars left after subtracting both the cost of goods sold and the overhead expenses) and gross margin (sales dollars left after subtracting the cost of the goods sold from net sales). Read Calculate your break even point, margin and markup to understand these figures.

Employer obligations

Are you keeping up with all your employer obligations e.g. super, PAYG obligations are usually part of a quarterly tax office return. This payment should be recorded on a separate line in your cash flow statement, so the money is put aside and you're not caught short every quarter.

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