EOFY cash crunch: the tax-time bills and when they land

Which bills collide at tax time?

30 June itself isn’t usually the problem. The problem is that a lot of the year’s admin and a lot of big payments crowd into the same six weeks. For a typical small employer, the list looks something like this:

Bill	Usual timing	Notes
April–June BAS (GST, PAYG withheld)	Due 28 July	Often the largest quarter for seasonal businesses
Q4 PAYG instalment	Due 28 July	Usually lodged and paid with the BAS
Super on June and July wages	7 business days after each payday	Payday Super applies to every run
Insurance renewals	Often 30 June or 1 July	Several policies may renew together
Stocktake and year-end purchases	June	Equipment, stock, prepayments
Income tax on last year’s return	Depends on lodgment program	Can arrive in the same season
Annual subscriptions, registrations, licences	Often 1 July	Small individually, noticeable together

Add a customer or two who slows payments while they finalise their own year-end, and a comfortable business can find itself short in late July.

How do you plan the six weeks either side?

Take a simple cash map from mid-May to mid-August. Week by week, list what’s coming in and what’s going out, including every item above that applies to you. The lowest point on that map is the size of your EOFY gap — and it’s usually in the last week of July, when the BAS falls due.

Then work through three questions:

1. Can any of it move? Stagger insurance renewals, ask suppliers for normal terms on year-end stock rather than paying upfront, and time optional purchases to when cash allows.
2. Is the PAYG instalment right? If this year is tracking well below last year, talk to your accountant about whether a variation is appropriate.
3. What’s left to fund? That’s the number to take to a lender — once, not in pieces.

Our business bill calendar walks through building the map.

What about buying before 30 June for the tax deduction?

It’s common advice, and sometimes good advice. But a deduction reduces tax on income; it doesn’t hand back the full purchase price. Buying equipment you don’t need, or can’t really afford, to save tax can create a July cash problem bigger than the tax saved. Get your accountant’s view on the current rules, then decide based on whether the business needs the asset. If it does and you’d rather keep cash free for the BAS, weigh up funding the purchase.

Which funding fits an EOFY gap?

• A one-off peak in late July: a short-term loan sized to the deepest point, repaid from August trading.
• A recurring seasonal squeeze: a line of credit, drawn in July and cleared as trade picks up.
• Tax plus older debt, or a large gap: a property-secured loan from $20,000 to $5,000,000; up to $5m is possible within 24–48 hours when the security lines up.

Unsecured and cash-flow options typically run from $5,000 to $500,000 for trading businesses, sized on turnover and bank statements. Once your map shows the number, bring it to a real person, or try the triage checker first.

An illustrative example

Illustrative only. A furniture retailer has a strong May and June, which makes its April–June BAS the largest of the year: $92,000 due 28 July. Three insurance policies renew on 30 June for $27,000 combined, and a container of spring stock needs clearing at the port in the second week of July. The cash map shows a low point of −$88,000 in the last week of July, recovering by late August.

The owner asks the broker to move one policy to monthly instalments, cutting the gap to $79,000, then arranges an unsecured facility in early July sized to the remaining low point. The BAS is lodged and paid on time, and the facility is cleared from spring sales.

Which EOFY tasks affect cash, not just paperwork?

Year-end has plenty of admin, but a few tasks change the cash position directly. Put these on the list for May and June:

• Chase every debtor before 30 June. Customers finalising their own year often clear old invoices if asked.
• Review your PAYG instalment position with your accountant, especially if the year has been very different from the last.
• Get insurance renewal quotes early so there’s time to arrange instalments or funding.
• Plan stocktake purchases around your cash map, not around the calendar alone.
• Check leave balances. Staff often take leave in July school holidays, and payroll peaks follow.

A little work in late May avoids most of the pressure in late July.

Does the new financial year change anything else?

Often. Award wage increases commonly take effect from the first full pay period on or after 1 July, lifting payroll and the super that follows it. Some registrations and subscriptions renew on 1 July too. Build any July increases into your cash map rather than discovering them in the first pay run of the year.

Get ahead of tax time — see if you qualify

EOFY crunches are predictable, which means they’re fixable if you move in June rather than on 27 July. Tell us what’s due, when, and what your map shows at its lowest point. There’s no credit check to enquire, your details aren’t handed out to a list of lenders, and a real person reads your enquiry and calls you. Please be accurate with the amounts and dates on the form so the first option we suggest covers the whole season, not just the first bill.

See if you qualify →