5 Common Cash Flow Mistakes and How to Avoid Them

Avoiding These Errors Could Save Your Business Thousands

Cash flow is the lifeblood of your business. But even profitable companies can go under if they don’t manage it properly.

At Streamlined Accountants, we see it time and time again—businesses struggle not because they lack revenue, but because they’ve made avoidable cash flow mistakes. Whether you’re just starting out or already trading, understanding these common traps can help you protect your business and plan for growth.

1. Mistake: Confusing Profit with Cash Flow

Many business owners look at their profit and loss statement and assume they’re in a strong position. But profit isn’t cash.

Why it matters: You can have sales on paper, but if clients haven’t paid yet—or you’ve overcommitted to future expenses—you could run out of cash.

✅ Fix it: Build and regularly update a cash flow forecast. It helps you predict when money will actually hit your account and when bills are due. We recommend using tools like Xero, Float, or Fathom for live insights.

2. Mistake: Ignoring Seasonal Fluctuations

Many industries have seasonal highs and lows—retail, hospitality, construction, and even consulting. But few businesses plan ahead for the slow periods.

Why it matters: Sudden cash shortages during off-peak months can lead to missed ATO obligations like BAS, PAYG, or superannuation (SGC).

✅ Fix it: Review historical sales trends and set aside a cash buffer during busy months. At Streamlined Accountants, we help clients create 12-month rolling forecasts that include seasonal adjustments.

3. Mistake: Overextending Credit to Customers

Offering generous payment terms without strict follow-up is a cash flow killer—especially when paired with delayed invoicing.

Why it matters: Your money is stuck in unpaid invoices, and you’re still paying your own expenses.

✅ Fix it:

• Send invoices immediately after work is completed.

• Use software like Xero or QuickBooks to automate reminders.

• Offer early payment discounts or require partial upfront deposits.

• Follow up with overdue accounts consistently.

4. Mistake: Not Planning for Tax Obligations

Many businesses get caught out by unexpected tax bills, including GST, PAYG, and super.

Why it matters: Falling behind on ATO payments not only triggers penalties—it can put you on their radar and threaten your cash position.

✅ Fix it:

• Set aside a percentage of income (e.g. 15–30%) in a separate tax savings account.

• Use accounting software that forecasts upcoming BAS and tax deadlines.

• Work with an accountant to stay on top of compliance and lodgements.

5. Mistake: Failing to Review Expenses Regularly

It’s easy to overlook unnecessary or bloated expenses when you’re focused on growth. But these add up fast—and eat into your cash flow.

Why it matters: Without regular reviews, you’re likely overspending on subscriptions, wages, or low-ROI campaigns.

✅ Fix it:

• Conduct quarterly expense audits.

• Use a tool like Dext or Hubdoc to track and categorise spending.

• Evaluate ROI on every major expense, from advertising to payroll.

• Consider automation tools to replace manual admin tasks and reduce staff overhead.

Real Case: Turning Around Cash Flow in 60 Days

A Perth-based tech consultancy came to us with strong revenue but constant cash shortfalls. We identified three key issues:

• Invoicing delays of up to 21 days

• Lack of tax provisions

• High software subscription overlap

We helped implement Xero-integrated invoicing, created a 12-week cash forecast, and trimmed $1,800/month in redundant tools.

Result: In 2 months, they went from chasing cash to consistently hitting a $25K buffer.

Don’t Let Cash Flow Mistakes Threaten Your Business

These mistakes are common—but completely avoidable with the right systems and support.

At Streamlined Accountants, we help businesses take control of cash flow with forecasting tools, tax planning, and clear financial strategies tailored to your industry and goals.

📞 Want clarity and confidence with your cash flow?

Call us today at 0451 040 656 or email info@streamlinedaccountants.com.au for a personalised consultation.

Let’s turn your cash flow from a stress point into a strength.