Budgeting
Successful businesses invest time in creating and managing budgets, preparing and reviewing business plans and regularly monitoring their financial situation and performance.
Budgeting is the process of estimating future revenue and expenses in order to plan how best to allocate resources in order to maximise profit. It helps companies to develop a clear path to their objectives and avoid short-termism and biases that can affect their future decisions.
Cash Flow Management
Cash flow management is an essential component of any business. It helps to minimise financial strain, and to ensure that companies maintain adequate cash balances for their payment obligations and future purchases of assets.
The main objective of cash flow management is to track and analyze the amount of cash received minus business expenses. This information can then be used to forecast company profits and determine when to purchase assets or pay debts.
Creditors Voluntary Liquidation
A company that is unable to pay its debts may wind up (close down) or be placed into liquidation, which can help minimise financial strain in business. However, companies are also advised to avoid litigation as this can delay the process and incur additional costs.
Voluntary liquidation is a fast and effective strategy to deal with an insolvent company that can no longer pay its creditors – including amounts owing to the ATO. It can also help directors comply with their statutory duties and reduce tax obligations.