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Cash flow tips and tricks for SMEs

Adam Zuchetti
Adam Zuchetti
20 December 2016 30 minute readShare
Alexander Laureti, LMS Advisory

Cash flow is always a hot topic for business owners. Accountant Alexander Laureti delves deep into the issue and explores some of the strategies businesses can employ to boost their bottom line.


Alexander Laureti, LMS Advisory“The lifeblood of a business is its cash flow, and the more that you can bring in sooner, the better.”

While this is a statement of the obvious, it is important to step back from your daily 'busyness' as a business owner to remember this point, and focus on ensuring your cash flow is in a healthy state.

In this Christmas-week podcast, accountant Alexander Laureti, of LMS Advisory, returns to discuss chasing last-minute Christmas receivables, tips for maintaining healthy cash flow over the holiday period, and how best to strategise for the new year ahead.

Plus much more!


Podcast transcript

Phil Tarrant: G’day everyone. Welcome to the My Business Podcast. Thanks for tuning in. As always, a pleasure to have you with us on the show. Also, thank you very much to everyone for your constant and ongoing feedback. Both the reviews that you're giving us on iTunes, and other places where this podcast lives, but also the connection that you're having with us via email. We do appreciate all those questions coming in. We're going to start doing some Q&A style podcasts pretty soon. My co-host, Adam Zuchetti, who's here with me today. Adam, how are you going?

Adam Zuchetti: I'm good Phil, and yourself?

Phil Tarrant: Good. You're busy collating all this information that's coming in. We'll probably try and put some science to it, and group them together so we can get some experts in to try and answer some questions.

Adam Zuchetti: Yeah, definitely. There's some interesting trends emerging. Quite a bit of feedback and questions coming through, which is good to see.

Phil Tarrant: Yeah, it's good. Just to give some context, it's two weeks before Christmas, not even that.

Adam Zuchetti: Not even a week and a half.

Phil Tarrant: It's like a week and a half before Christmas that we're recording this. We're right in the middle of a heat wave. I think last night, for anyone who's based in Sydney will remember, the hottest evening in December in 160 something years. It was pretty warm. Our air conditioner's going overtime here right now. There's people getting around in shorts and T-shirts to be a little bit more comfortable but business goes on. We're running up to Christmas, so people are already thinking about holidays, how they're going to spend their time over the coming period, relaxing, enjoying family, good food, wine, etc., etc., which is all cool, and I'm looking forward to a little bit of down time in between Christmas and New Year’s. But for business owners, it's a really good time to sit back and reflect, and recharge and realign your thinking for the period ahead. This is a period of the year where I do a lot of that sort of stuff. It's always nice to have a deadline. New Years is always a good time to make changes if changes are for you. I like change. I thrive on change. I cultivate change, and I try and drive change as much as I can. My job as a leader in business is to instil the culture of change, embracing change with our team. I like to think we do it pretty well here. Adam?

Adam Zuchetti: Well, there's been quite a bit of change in not much time.

Phil Tarrant: Change is good.

Adam Zuchetti: Quite evident, yeah.

Phil Tarrant: Yeah. Running up into the Christmas period, a lot of the conversations I've had over the last few weeks or so has been with our finance team. In particular, looking at aged receivables. Making sure that cash flow is good over the holiday period, making sure there's plenty of money in the bank so we can continue to maintain our requirements, both from an employee perspective, but also all our other compulsory compliance and other statutory payments that we need to make, and we're looking pretty good. It's something we've been working on for a little while.

I thought today, what we could do is, have a bit of a chat around this Christmas/New Year’s period, and holiday period, and how you can use that time to put a little bit of science or thinking into the business moving forward. On that basis, I've asked Alexander Laureti to come to the studio. Alexander is from LMS, which is a advisory firm. You might have heard him on the podcast a couple of months ago. Alexander's our accountant so he works closely with us on helping us shape this business, particularly from a financial health perspective, but also from a growth and forward planning perspective. Alexander, thanks for joining us mate.

Alexander Laureti: Thanks for having me back. Yeah, congratulations on the success of the podcast so far. I've found it really essential listening, and got a lot of feedback from my clients as well saying that they're really enjoying hearing real life stories from people out there in business. It's been great.

Phil Tarrant: Excellent. I appreciate the feedback, Alexander. What we try and do is keep it real. It's no bullshit. We're all running businesses here. We want to make sure that we can, I guess not only share our own journeys but also our knowledge, and expertise, and our learnings with the wider SME sector. We're very pro-SME. We're an SME. We're passionate business owners. We acknowledge the role that companies like ours and the millions of other companies play in driving the health of Australia's economy.

We are the backbone to Australian economy. We employ the majority of people. Most people work for an SME. Yes, some people work for big corporates, but getting on that, we work with a lot of big corporates. When I look at our debtor ledger, it's normally the big corporates who are at the top of it. What do you do over this period of time, trying to chase people for cash, Alexander? What's your secrets there?

Alexander Laureti: I think a lot of the challenges that people come into, coming into the Christmas period as you said, is making sure there's enough money in the bank to pay the bills as you go over the Christmas period. You've got leave for your employees, you've got your savings that you want to make, your holiday spending money, things like that. A lot of the preparation that has to come in to this Christmas period has to commence a little bit earlier. This might be a little bit untimely for some people. it's certainly room for improvement in the future.

I think it's a process that, as you know, where the business will stand and what your expenses are towards the end of the year, you've really got to start planning in advance. Getting to know your business, understanding the ebbs and flows of the cash flow as well, and knowing what your cash flow requirements are. You really, as a business, have to start a little bit earlier in getting your debtors out early. Getting your invoicing out earlier to customers. Giving them every opportunity to pay by the due date, and to pay before Christmas.

A lot of business that I work with will close earlier in the month. They might have, usually a practice or a procedure, were they'll be invoicing at month end. It's a great idea to invoice as you go, throughout the month of December. Get invoices out there to customers, give them every opportunity to receive an invoice, check an invoice, agree that it's payable, and they might want to clear that off their ledger too before Christmas so they have less things hanging over their head.

I think that, especially towards the month of December, if you can invoice out to your customers earlier, then that's something that can bring a little bit of cash flow in sooner too. Especially if you're on 7 day terms, or 14 day terms. Of course, if you're invoicing out earlier and people don't pay you until the end of next month, there's not all that much that you can do about that. From that perspective in forcing people to pay you any sooner, but if you can get the majority of your invoices coming in and ticking over, the life blood of the business is its cash flow. The more that you can bring in sooner I think the better.

Phil Tarrant: For some businesses, it's a really tight period for cash flow because they might have skeletal staff, and they might not be producing anything particular at that period of time. All the costs that usually exist in a business are still there, it's just that they're not making any money. For other businesses, this sort of summer period can be the peak. This is when they generate the lion's share of their income.

For seasonal businesses like tourism businesses, or holiday orientated business, they need to be thinking about maximising a period of good health in terms of cash coming in but planning moving forward to when times are a little bit leaner.

Look at our business, and we ebb and flow a little bit. We're pretty consistent right across the 12 months because we're not seasonally orientated. What's your recommendations for businesses who, the flip side, this is a great time for them over the summer period and it's when they take the most of their cash. What do you do with that money to make sure that you can stem those leaner times?

Alexander Laureti: Yeah. It's really, as you said, if your business gears up towards Christmas because you're seasonal and because this is where you're going to make the most of your money, making the money is half of the battle. Once you've collected that money, then what are you going to do with it? How is it going to either benefit your business, pay your bills, or how is it going to help you grow in the next year?

I really think it's important to have whatever money that you're collecting, form part of a budget for the business. I think it's also important to have some kind of disciplined savings plan for the business as well, so that if you make your money in six months of the year, you've got to put aside for those lean times as well. It's always the temptation that, "There's money in the bank, let's go ahead and spend it, let's go ahead and draw it, let's reinvest on some essential business items, let's do some upgrades, let's change our equipment"; there are many things that businesses can choose to do.

I think that if you're making your money in a seasonal nature, you definitely have to pay attention to when that money is coming in, but make sure that you've got a plan in place to know that, while times are going to be lean for the next six or 12 months after that, probably only six months, that you do have money put aside to continue paying all the fixed costs of the business. Your staff; if you're lucky enough to be able to have a business that can gear up and reduce staff numbers during those down times, you might be able to ride the ebbs and flows a little bit more.

If you've got a business with strong fixed costs that are there whether you're earning a million dollars or whether you're earning a hundred dollars, and anywhere in between, you really need to be disciplined in putting aside a little bit of money along the way. Whether you call it a war chest, or a savings plan, or an emergency fund, that you can then have to access if anything goes wrong with the business, or to fund future growths. Whatever those initiatives might be.

Phil Tarrant: A lot of people who have problems during this period of time, seasonally orientated businesses, is that they collect ... over the summer period for an example. They're flush, they've got plenty of cash, so they go out and pay for all those things you just mentioned. A lot of times they forget about the statutory requirements associated with higher income. If you're collecting more money, you're going to have higher BAS. If you're collecting more money you probably need more staff to help manufacture that money, therefor your pay as your go with holding for employees is a lot higher. You might have payroll tax at a period of time during that higher earning. You might have higher super contributions you need to make. A lot of people, they sit there and think they're flush with cash, but they fail to remember there's statutory obligations in terms of good times.

Alexander Laureti: Absolutely.

Phil Tarrant: What's your sort of key tip for people to make sure they can meet those statutory requirements when they fall due, because we're talking December period, a lot of that's going to be due March quarter isn't it?

Alexander Laureti: A couple of things that I do personally, from my own experience in my business, we'll put aside a couple of weeks’ wages so we know that as we go into the January period, a lot of people are on holidays but so are business owners. Generally, not much happens in terms of activity in the month of January. It's a great opportunity for us to have a little bit of down time. It's also an opportunity to focus on the business. We'll be saving up in the month of December, putting aside some extra cash for payment of things like employee wages over that Christmas break, and any other statutories that might come up.

Another discipline that I've found that's been quite successful, is that not every business does but I think would be a very good idea, is to set up a separate business account, which they call a GST account, or a compliance account, or a separate savings account which earns interest. Every time they make their money, whenever they do, if they can put aside for example 10 per cent of their income into their GST savings account. Not treat that as their own money but treat that as money towards statutories, they can find that by the time they get to when a BAS is due for example, or when your payroll pays are withholding, or your superannuation is due, they do have a little bit of savings that they can put towards those bills as they go.

For a business that makes its money over a seasonal period and isn't necessarily putting that money aside for future liabilities as you say, if they were able to have put 10 or 15 per cent aside towards those future statutories, they would have spent what was theirs without having to be caught not having put aside enough money to pay what really is, for example, revenue they've collected on behalf of the government, or further employee benefits such as leave payments, superannuation, pay as you go withholding, that really, your business is responsible for collecting a payment on behalf of the government and on behalf of doing the right things for the employees as well.

Phil Tarrant: I think a lot of people sometimes don't think about the connectivity between cash flow and emotional happiness.

Alexander Laureti: Yes.

Phil Tarrant: I think what you're saying is very good in terms of, with some diligence and some rigour you can make sure that you can keep yourself more balanced in terms of the stress that you have about making your statutory payments to the government. As you said, you're collecting that income on behalf of the government. You need to be a responsible Australian business owner to make sure that you give that to the government in time. If you don't, there's penalties.

Alexander Laureti: They'll get it back with interest. Yeah.

Phil Tarrant: Yeah, get it back with interest. Adam, you know, I know we spoke about this before, but in your conversations with business owners, and you speak to them like I do all the time, do a lot of people bring up the stress or the emotional turmoil of cash flow and how it's always front and centre, that's probably the thing that worries them the most?

Adam Zuchetti: Yes. It is a real problem. Business owners I think feel a lot of frustration by this. It often gets to the point where they just feel so swamped, how do I actually get out of it, and then they fail to be able to gain that foresight to dig themselves out. I think it's really important to be able to put that in plan when you're in a good state of mind. As you were saying Alexander, over the January period that's a classic time to be able to do that. It then alleviates problems further down the track.

Alexander Laureti: I also think it's very important to combine that with budgeting as well. If you have a business plan, if you have an idea of what your expenses are going forward, things like your statutory requirements, people often forget, it catches them by surprise that that's a true cost to their business. It doesn't necessarily, you know GST doesn't hit your profit and loss for example. It's reported a different way. It's a balance sheet item.

If you have a provision in your budgets on a weekly, monthly, fortnightly, quarterly basis, if you put an amount in there for what your usual business activity statement costs, if you put an amount in there for what your superannuation is, if you're planning in advance and you have a savings plan heading towards that, I think that will help a lot of business owners sleep at night. Not only do they have money saved up for payment of future liabilities, they also know with a reasonable range what those liabilities will be coming up.

It can really help you plan for whatever it is you want to do in your business, but also not to be caught by surprise. I don't think any business owner wants to be caught by surprise, and I don't think any business owner wants to be stressing about these things. Especially over the Christmas break. It's a good time over that Christmas break to sit back and say, "What do I want to achieve next year? What can I do differently? What can I improve?"

It could be that you set yourself a budget, you set yourself a savings plan, you just feel like you're not making any ground, because "I'm always caught short when it comes to my BAS", or, "I'm just not collecting enough revenue by the time that comes around". Having that knowledge will then give you the opportunity to change it. If you don't have that information at your fingertips, it's very hard then to go back and make any positive changes.

If you can take this time over that break to really have a look and understand how your business performed last year, and set some plans for next year, set a savings plan in place, 2017 could be a much more comfortable year for you.

Phil Tarrant: I think that's the objective. With the whole GST thing, a lot of people, a lot of business owners I speak to, they consider it as cash flow. You take another 10 per cent, you've got to pay it out, it obviously balances out based on what you're spending. One thing that's always worked for us is, we view the world ex-GST. We never think, including GST, because we know that 10 PER CENT needs to go to the government. It doesn't really come into our cash flow forecasting. We're always cash flow forecast based on an ex-GST amount because that's the amount you get, that's the money you have to play with to pay people.

Alexander Laureti: That's yours, yeah.

Phil Tarrant: That works for us. I know I have a lot of conversations with people within the business. I'll say, "Well show me the budget." They'll give me including GST costs. I'll go, "I don't want to see that. I want to see ex-GST." It's a rigour that we've got that works really well. Is that something you see working for other people?

Alexander Laureti: Yeah, absolutely. I think that what you're talking about there is also cash flow forecast as well. You've got your budgets, which is a revenue target. Whatever revenue target you set for your business, you do invoice plus GST. In essence, yes, 10 per cent less of what you collect is yours. If you talk ex-GST, that's a very good way to look at things. If you then factor in the fact that, I've made significant purchases in the period, if you're accounting for those things and you're taking into account everything on an ex-GST basis, then I think that that's giving you a more realistic picture of where your business sits.

Phil Tarrant: That's good. We've spoken about how, for seasonal business, that the summer period can be good. You can generate a lot of cash, and how you need to ensure you manage any downside during the winter months or any other seasonal periods. We started off talking about how it's a lean time for a lot of businesses as well. What do you do, as I said we're sort of a week and a half out of Christmas or so, what do you do if people aren't paying during this period of time? What can you do?

Our guys, they're just hustling at the moment. 100 per cent of their focus is to make sure they bring money in, and drive our aged receivables. On occasion, we'll get to a point where we just go, "Look this isn't going to happen. It's time to hand it over to the lawyers." How do you work out where that line lies in when you think that you might need some extra assistance in terms of collecting cash?

Alexander Laureti: I think that giving everybody a few chances is not a bad thing for a business. I think that going straight down the legal route, while it might be the most effective, it's also the most expensive. It can also slow down the process continually because once you get lawyers involved, it becomes confrontational. It's not something that you're negotiating and working with.

As you head into that Christmas period, it might be a question of the conversations that people are having with the people that owe the money, and saying to them, "This is how much we're owed at the moment. We know that this invoice is going to fall due you while your office is closed. Can you pay some of this invoice now in advance, or can you confirm that you will pay it?" These days, internet banking, you can preset your payment dates. You can get pledges and promises from people that they can set in place without needing to physically be there at their office. They could be in Bali on Holidays, and they could still have internet banking payments happening over that time.

I think it's important to get in contact with the right people, who have the authority to make the decisions, if that's always possible. If it's business owner talking to business owner rather than the accounts payable department talking to the accounts receivable department. Sometimes you need that ultimate decision maker saying, "Yes, I agree, your business is important to me, I want to make sure that I pay you and I make sure that I pay you on time." If you can get a pledge that says it's going to come in over January, at least you know it's there. At least you know it's coming in.

If they can't pay in full, well, can they pay half of it before Christmas and half of it after? Any collections that you can bring in for your business will be better for you in your bank account than it is in theirs. For those problem debtors that just aren't willing to pay, often that's a symptom not of their desire not to pay, but it's their inability to pay.

You've got to be looking at your dealings with those customers and saying, "Will I continue working for them?" Is there a point of time where I say, "Look, I cannot continue providing any services for you, or providing you any goods, because I'm not getting paid on time. If you're unable to pay me, is that a symptom of the fact that your business is suffering from more substantial cash flow difficulties than what you're telling me? Are there other people that you don't ow money?"

You as a business can they decide if it's possible to reduce your exposure to that potential person. I think that's an important part of the process as well. If you've constantly got the same people that are always paying you slow, and always giving you excuses, are they running their businesses effectively, is that the kind of customer target market that you have? If you can work around that and you know who you're targeting for your particular business, then that will give you the opportunity then to reduce your exposure to those problem clients that come up.

Then, if it doesn't work, debt collectors, legal notices, I don't imagine much will happen over the Christmas break anyway because the lawyers go on holidays too. If you're at that point just before Christmas and you're starting to issue a legal notice now, it's probably too late for you to get a result for bringing that money in before Christmas.

Adam Zuchetti: A common problem that we come across though, is obviously a smaller business dealing with a large corporate. The payment trends can just be woeful. Add to that, there can also be the lack of confidence for a business owner. A small fry café owner or something like that, going up to a major corporation and saying, "Look, you guys owe me money. I want it," and they keep stalling you, we all know that scenario. How do you actually get around that though?

Alexander Laureti: I don't know that there's a hard and fast solution to that problem. I think that in some industries, the nature of the business is that, he who has the bigger bank account has the power. If you're dealing with a large corporation, a lot of the time you'll find that they'll dictate the terms with you, irrespective of what invoice date, you know, "I want to be paid in seven days." "I'll pay you in 60 if you want your money."

Sometimes there are some industries and there are some people that you deal with that you don't have much of a choice in that. I think that's where your budgeting and your cash flow analysis, and really understanding business comes into play as well. If you know that there are certain you will work with that just aren't going to pay you on those terms, you can try and change your contracts with them. You can try and say, "Well we want 30 per cent upfront and then the balance." You can try and negotiate, but in the situations you're talking with, you're talking about the small business owner dealing with the person who has the power. You can negotiate until the cows come home, and then just get a flat out no when it comes to the end.

I think it's also important to know and understand when that situation does arise, so that you can plan around it. Some solutions that people might have for that is knowing that, "Look, they're good payers, but they pay slow. I have my business needs now," so you've got to make sure that you have, in your business, a fall back of say for example, an overdraft facility or some kind of savings plan that you've got in place to say, “Well I've got weekly bills or fortnightly bills that I have to pay, I'm not going to get paid this substantial invoice until 60 days." You can see how, from a cash flow projection perspective, you need something to help you carry through that shortfall. It might be that some business owners without the power to negotiate, need to have a fall-back position which is support from their bank, from the institution that they work with, or from other businesses as well to try to balance and work that out.

Adam Zuchetti: Is it also sort of a matter of playing politics, and trying to get these big corporates at their own game? I remember someone telling me a story of, they had one of the really large listed firms owed them quite a substantial amount of money, and chasing up to the end of the financial year. They couriered over an invoice on the 30th of June. Being a listed firm, it would have had to display this outstanding debt on its annual receipts.

Of course, the bean counters there, they weren't quite happy with that. They literally couriered over a check that afternoon to ensure that it was paid by the end of the 30th of June. Is that something that you think a lot of businesses can actually do? Try and play the big corporates at their own game?

Alexander Laureti: There are businesses owners that will go out, for example, smaller businesses for example might be doing their invoices on a cash basis. Basically, they might be dealing with, this is the other end of town but it's the smaller invoices that say, "If you pay me now you get your tax deduction before the end of the year." You send out your invoices with the timing, on purpose, so that they have the incentive to get their tax deduction by paying for the services prior to the end of the financial year.

The situation that you're describing there, is taking advantage of the fact that a large reporting entity wouldn't want to have all those additional expenses on their books because they want to show as much profitability as possible. If you know that that's the circumstances, then sure, that can be a great tool, that can be a great trick. The question is knowing that that's really the case, and secondly, does it get to the right person who cares enough to fix that situation up. As you said, it went straight to the right person, it was brought right to their attention.

Knowing who you're dealing with, and the appropriate person at that time, is so key in getting that result in the situation you're talking about, or just knowing who else you're dealing with and saying, "Look, I know what my cash flow needs are. How can I get the best payments terms from my customers?"

If you can give them incentives like, pay before the end of the quarter, you can claim that in your BAS, or it gets claimed by the end of the tax year if they're lodging a tax return, there's some simple things that business owners can do to give themselves a better chance to get paid earlier.

Phil Tarrant: There's no hard and fast rule with this, it's just all a big game often. At least you know if your large debtors aren't disputing the invoice, you're probably going to get paid, it might just take a little longer. How do you cover the shortfall? You spoke about overdraft facilities. We could also have a chat, we'll have it some other point, around factoring or invoice discounting. There's some other ways in which you can look to fast track the receipt of money to improve your cash flow.

My thoughts around all this is that, if it's a genuine invoice and someone needs to pay you money for a service or a product rendered, it's your right to go and collect that cash. You need to do it the right way. You need to do it under the umbrella of maintaining relationships, and maintaining good business, and transparency, and good ethics, and all that sort of stuff. Often people just don't want to pay. You need to work hard at it, constantly work at it and actually understand who owes what.

I remember really early days in our business, nine odd years ago, when it was very, very small. A couple of people would actually, people owed me significant money I'd beam down to their office, and I've knocked on the door, and I've gone in there, and I've sat down in the reception and said, "I'm not going until you give me a check." You've got to do these things sometimes. If you're due the money, go and ask for it. There's nothing wrong with it. Often you need to do things which can make you uncomfortable, and it might not come naturally to chase money, and lot of small businesses say this; they don't want to be seen to be aggressive chasing money, or they don't want to be seen to be annoying chasing money. You're owed the money, go and collect it.

Adam Zuchetti: It's also business, it's not personal. You need to sort of keep that in mind.

Alexander Laureti: If you can separate the two.

Phil Tarrant: You've got to separate the two.

Alexander Laureti: For businesses, the transaction's not complete when you've provided the service or provided the good, it's when you've been paid for the good. It's understanding and accepting that mentality. If you're in a small business for example, you're the person who's going to be ultimately responsible for collecting that money if something goes wrong.

It's not something that is a pride thing, or somebody saying, "I'm too busy to do this." You've got to make the time to do it. You've got to realise that you're the most effective person to achieve that. Even if you are timid, or if you're the kind of person that doesn't like to be confrontational. The story that you were just telling then might not work for everybody, but it was probably very effective, and it could work for a lot of people.

Phil Tarrant: I got the result, I got the result I wanted.

Alexander Laureti: Absolutely. You can achieve a similar result by personally getting involved by email, phone calls these days. There are other ways that you can get past being nervous, or starting that initial contact. I just wanted to go back a little bit to where you were talking about going legal, for example. I think it's important for business owners as well, when you're having these conversations with debtors about payment, and just wanting to know that they've accepted an invoice and they've received it.

I think it's important for you as a business owner to document those conversations and to get things in writing along the way. If you are going to end up in a dispute with somebody who owes you money, it would be very beneficial for the lawyers, or the debt collectors, or anybody else who's helping you saying, "Well did the person receive this invoice? Was there ever any dispute?"

If you've got a record of a conversation, or an email from them confirming, "Yes I received the invoice. There's no dispute over the goods, I just can't pay you right now," that is support if something ever ends up in the hands of lawyers or if it ends up in court. It's a file note for you to then be able to go back and say, "My case is supported." You don't want to end up in court, but you need all those little things, documents along the way to protect you.

Adam Zuchetti: Effectively, you shouldn't always do it in person or via phone. There should be some email or written correspondence.

Alexander Laureti: Even if you file note it later, but it's very good for business owners to get into habit of saying, "Look, I appreciate the conversation we've just had on the phone. I'm just going to send you an email to confirm what we discussed. If you've got any problems with that, please let me know by return email. Otherwise I'll take it as a true record of that conversation."

Any file notes that you can have, that can support your argument. Even if it comes to needing to call somebody who owed you money two months in a row. You can refer back to that first conversation, you're not having to rely on memory. You're saying, "Well, you have no dispute over these invoices. You promised to pay me. Now is the time where you've at least got to pay me something if you can't pay in full."

If you had that document in writing by email, you can refer back to that. Or you can send out a letter confirming. The more paper trail that you have supporting your argument, the less they'll be able to backtrack on their position later, and try and use the system against you.

Phil Tarrant: If it does end up in court, your lawyers are going to want as much information to strengthen your case as much as possible. Some of that works really well, and I completely agree with everything you've said. A lot of this communication is good to have over the phone or in person because you can read people a lot better. It can be much more fluid but Follow up with an email.

You just need a really good CRM system. If you just document it as a file note in a CRM, "Spoke to Phil. Said he'd promise to pay by here. We might get a follow up with an email. Happy days." That's file noted. Then you can pull that out, because you can't rely on memory. I can't rely on memory. I've got to remember a million different things. It's easy to document if you've got your process right. It's good.

Alexander Laureti: If you don't have software to help you with that, just have a little diary. Write it down and say, "This is what I did that day." It's a good discipline for business owners to remember what they did anyway, whether it's debtors or whether it's anything else in the business. Having to rely on your memory, when you've got so many things going on, can be difficult. Writing everything down, documenting it, can be very helpful.

Phil Tarrant: That's good. Alexander, we're out of time. It's just flown by. Half an hour. Got away.

Adam Zuchetti: It always does, doesn't it?

Phil Tarrant: Yeah, it always does. Any questions around this sort of stuff, payables, receivables, better management of those, your statuary requirements, better budgeting, all the stuff that you should be thinking about from a financial perspective in your business, email them through to us. We'll get them answered. Any tricky or curly questions, or just some guidance on better ways to approach this part of your business, you can email This email address is being protected from spambots. You need JavaScript enabled to view it.. As I said early on, we'll aggregate a whole bunch together and do some Q&A stuff which is really good.

Remember to check out mybusiness.com.au, we're also on all the social stuff. @Mybusinessau I think on Twitter. You can follow me, @PhillipTarrant on Twitter. Adam Zuchetti, also on Twitter. You can read what we're up to. Keep those reviews coming. Tell your friends about the podcast. It's really gaining a lot of traction. We like doing it. It's just good fun. Sharing not only our own journeys, but the journeys of other business owners in Australia as we keep building on the great work that we're doing here. Thanks for tuning in. This is our last podcast before Christmas?

Adam Zuchetti: I believe it is, yes.

Phil Tarrant: It might be. Yeah. This will be coming out a couple days before Chrissie I believe. All right, yes?

Adam Zuchetti: Yes.

Phil Tarrant: Okay. Merry Christmas. Oh, and a happy New Year. We'll see you in between that. We'll sort that out. Yeah. It's been great having you over 2016. We look forward to a better 2017. Thanks guys, thanks for coming in.

Adam Zuchetti: Cheers.

Alexander Laureti: Cheers, thanks very much for having me.

Phil Tarrant: Okay. See you soon. Bye bye.



Cash flow tips and tricks for SMEs
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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