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Business cash flow management strategies from smart SMEs

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5-minute read

Business cash flow is a perennial challenge for many small businesses, made tougher by the current cost-of-living squeeze – but keeping money coming in and maintaining a positive net cash flow can be easier than you think.


Some SMEs are using canny ways to manage company cash flows, by diversifying their business model, changing the way they work and adopting innovative payment solutions, like Westpac EFTPOS Air. Here, two of them share their stories.


Key take-outs

  • Smart ways small and micro operators keep track of outgoing cash and balance business cash flows
  • The importance of separating cash flow from operating activities and your personal finances
  • How Westpac's tap to pay app, EFTPOS Air, helps keeps money coming in
  • How to keep planning for the future, while managing day-to-day operating cash flow.

The cash flow challenge

It’s no secret that times are tough. Consecutive interest rate hikes, rising costs and soft consumer sentiment are pointing to challenging times ahead for small and micro businesses who are trying to stay cash flow positive.


Recent research from software provider Xero shows that tough times are causing small business owners to raise prices or resort to using their personal accounts to remain profitable.


“Cash flow is a major challenge for many small businesses,” notes Leigh O’Neill, Xero’s Executive General Manager, Money.


“Our research uncovers some troubling signs about how Australian small business owners are coping in the face of today’s volatile and uncertain economy, and the sacrifices they are making to keep their businesses going and employees paid.”


The report details the ‘domino effect’ late payments can have on cash inflows throughout the supply chain. If one business owner has trouble paying their bills on time, this effect can reverberate up and down the supply chain causing strife for the financial performance of businesses micro, small and big.


While the market outlook may be bleak, there are savvy tactics and cash flow management strategies you can use to stay afloat and build your business.


Here’s some advice from two different businesses on how they work towards staying cash positive and manage cash flow issues.

Be the boss of your own balance sheet

Managing your cash flow and being the boss of your company's balance sheet is key for business success in the rocky economic climate.


Arthur Panayiotakis, who runs New York Cakes with his sister Kalliope, understands the perennial challenges businesses face due to cash flow all too well.


The Sydney-based family business supplies cakes, desserts and pastries to hospitality venues in Sydney, Wollongong, ACT and Newcastle, NSW. He knows firsthand how hospitality businesses are doing it tough.


“We are flexible with our customers when they are having difficult times, but we don’t like it getting too out of hand as we have to pay our suppliers,” says Arthur.

Choose tools to make cash flow control easier

The push and pull of cash inflows and outflows from day-to-day operating activities can make business life stressful. So, the priorities are to monitor cash flow to make sure you get paid in full and on time. This means having the necessary payment options on call.


Using the right technology is key to keeping more cash on hand.


This can include a variety of payment options, including EFTPOS machines, as well as newer technology such as Westpac EFTPOS Air. All you need with this option is your compatible smart phone or tablet and EFTPOS Air's secure, in-person mobile payments app will do the rest. Your customers simply tap, pay and go.


Importantly for positive cash flow, settlement is same day with EFTPOS. And, to help save more money, there are no set-up costs, monthly fees or lock-in contract, just 1.4 per cent fee per transaction.


Susanne Mulholland of Queensland-based fashion business Emma Hobson Designs rates EFTPOS Air “as the most cost-effective payments system” she is aware of.

Give your customers payment options

Arthur Panayiotakis recommends giving customers a variety of payment options.


His business New York Cakes is in the fortunate position of having cash flowing in from three retail stores while the wholesale business operates on 7-to-14-day payment terms giving strength to its balance sheet.


“Obviously having both retail and wholesale helps with overall cash flow management, as we get paid straight away in the retail business,” he says.

Keep personal and business accounts separate

For Mulholland, disciplined cash flow management is key, especially as she has ambitions to grow her business on the ground and online.


She keeps a clear view on cash spent. “Keep your business bank accounts and personal accounts separate,” she advises. Additionally, she separates her accounts receivable – the incoming cash generated by her customer payments process – from her cash outflows on supplies.


“I have my Westpac business transaction account, which is attached to my EFTPOS Air app, where I don’t have a card attached. When I [need to spend money on the business] I will transfer it into an account with a card attached. It makes for more mindful decisions about the reasons for cash spent," she says.

Have a plan for the future

Mulholland’s business involves selling plus-sized clothing via markets in Central Queensland. She also has a business running tours to India, where she developed her textile supplier contacts. Previously she’s run a homewares business and has been a marketing executive in professional service firms.


She believes that many entrepreneurs fail to look to the future because they are so focused on the present state of play for their business operations. Cash flow forecasting is a useful tool.


“Work on the business instead just in the business,” Mulholland advises. “You are the whole thing, but it can be easy to just do the things you enjoy doing.


“Businesses go wrong because they haven’t laid the foundations, and then they start to grow. They then find that they fall behind. It’s a balancing act. This is where technology and integration are important,” she says.

Know how much cash you have at all times

The importance of keeping track of your cash flow statements so that you always know your cash position cannot be overstated, says Mulholland.


“When I ran my previous business, my accounting software gave me up-to-date digestible financial and management accounting information, that is vital to help you keep track of outgoing cash and to calculate cash flow.


“At the end of the day, ‘if you don’t have the money, you are stuffed and that’s cash flow in a nutshell.”

Know your market to keep money flowing

Arthur Panayiotakis is a great advocate for the importance of knowing your market to generate enough cash flow to grow your business.


He says New York Cakes concentrates not only knowing what cakes and pastries customers like to eat, but on making its manufacturing processes as effective as possible and keeping sight of future cash flow.


“That way we are able to generate value for money for customers and, in return, have return sales, cover our expenses and then invest in our business and move forward.”


Through this lens, managing cash flow looks simple, he suggests. “At the end of the day, cash flow is made by generating a product or service that the market needs and provides value to customers.”


To sum up

Generating cash and keeping it flowing is the key to success for businesses of all sizes, but maintaining balance between incoming and outgoing money is not always easy, particularly in a slowing economy.


Smart business operators are reviewing their business models, changing the way they work and scrutinising their balance sheets to fine tune financial performance – and paramount for all in the perpetual quest for positive cash flow is ensuring that payments land ASAP.

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Things you should know

This information does not take into account your personal circumstances and is general. It is an overview only and should not be considered a comprehensive statement on any matter or relied upon. Consider obtaining personalised advice from a professional financial adviser and your accountant before making any financial decisions in relation to the matters discussed in this article, including when considering tax and finance options for your business. Westpac does not endorse any of the external providers referred to in this article.


Eligibility criteria, terms and conditions apply for EFTPOS Air. 


  1. Compatibility: To use EFTPOS Air your iPhone or Android device will need to be Near Field Communication (NFC) enabled and running on one of the supported iPhone Operating Systems (iOS) or Android Operating Systems (OS) listed at, which may change from time to time.  Tap to Pay on iPhone requires iPhone XS or later running iOS 16.4 or later and a supported payment app. Some contactless cards may not be accepted by your payment app.
  2. Mobile coverage: Internet connection is required to take payments.
  3. 1.4% flat rate pricing: Applies to eftpos, Mastercard and Visa payments by card, mobile wallet, or wearable.
  4. Same day settlement: Subject to system availability, settlement is performed directly after business day cut off. Business day cut-off for EFTPOS Air takes place 7-days a week at 8.50 pm (Sydney time). Settlement must be to an eligible Westpac business transaction account.
  5. Business accounts: Before making a decision about any of our products or services, please read the terms and conditions available at Fees and charges apply and may change.