The first few months of the year present a few big liabilities for business owners, which can be a bit of a headache if you've been closed over the Christmas and New Year period, bringing in limited to no income. Here's our tips to ensure you're best prepared to ride the slump over those couple of months.
Unless you are in retail, you are probably coming back to work after the Christmas/New Year break with a bit of a cash crunch. Closing the business for a couple of weeks means reduced or no revenue coming in, but there’s still bills that need to be paid. A lot of small businesses struggle in the first few months of a new year because they haven’t prepared for the big liability payments that land during that time. Below are some tips to prepare for them and ride the slump through to smooth sailing.
Know your dates
It’s pretty hard to prepare for big cash outlays if you don’t know when they are coming. Below are the big ones for the first couple of months of the year:
- 28th January – December quarter superannuation payable
- 28th February – BAS payable
If you are paying PAYG withholding (the money withheld from your staff’s pay), then you need to add the 21st of January and February for those payments
Know your balance sheet
Knowing what your liabilities are at any given time means you are never shocked when the payments are due. Take another step and keep these amounts in another account so you are not using the money in your day-to-day operations.
Develop a system
We find that the businesses that manage their cash most efficiently are the ones that develop a system for quarantining their liabilities and stick to it. This might be as simple as a weekly short analysis of the balance sheet and transfer of funds out of the operating account.
Staying on top of your liabilities can be the difference between a business always chasing its tail, and a business looking forward and reaching for growth.
If you’re always in a rush to meet these deadlines and often miss them, contact the team at Carbon. We can make the lodgements on your behalf, leaving you to focus on areas of your business that you’re good at.
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