A hand up for your small business clients on cash flow

The ATO’s Cash Flow Coaching Kit is a free resource that it has provided for tax professionals and business advisers. It is designed as a value-add advisory service to use with small business clients, but does not replace any existing accounting or financial tools, although it can be used to complement software accounting packages.

With its tailored coaching conversations about cash flow management, the ATO’s kit can be particularly useful in times of financial stress. Cash flow problems continue to be a major issue for small businesses, and may indeed be more so after the past year of COVID woes. Research shows:

  • almost half of small businesses are under financial pressure within the first year, and this often increases into years two and three of business
  • 60% of small businesses cease operating within their first three to four years
  • 90% of small business failures are due to poor cash flow
  • small businesses who manage their cash flow effectively are more likely to succeed.

Tax professionals and business advisers can use the resources in the kit to help small business clients better understand the actions they can take to manage their cash flow. This includes:

  • learning the fundamental concepts of cash flow
  • understanding how cash flows in and out of their business and ways to assess business viability
  • scenario planning to identify possible actions to improve performance by increasing cash in or reducing cash out in their business.

Practical “show me how” webinars are available for those who want to learn more about the Cash Flow Coaching Kit. Here are session details for and links to the registration for Cash Flow Coaching Kit – 1 hour introductory session (January 28) and Cash Flow Coaching Kit – 30 min workshop (January 29). After registering, a confirmation email will be sent to the email address you provide.

The Cash Flow Coaching Kit is available in digital and paper versions:

  • To access the digital version, email cashflowcoachingkit@ato.gov.au.
  • Tax professionals and business advisers can order the paper version through the ATO’s Publication Ordering Service. Search for “Cash Flow Coaching Kit – Lite” (NAT 75239-10.2019). You will need to log in or register under the Tax Agent category (including BAS agents) to order the kit (you may need to change your registration type to “business” to enable you to order a kit).
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