The five cash flow hurdles inhibiting Aussie businesses

Kelvin Tyler • December 21, 2023

A smooth and reliable level of working capital is essential to the success of any business and with the current economic challenges it’s becoming harder for businesses to maintain this.

Recently released data from accounting platform Xero shows one-third of Australian small business owners are unable to pay themselves due to cash flow challenges and 27% are being forced to dip into their personal savings to mitigate rising costs.

Inflation has greatly impacted Australian businesses’ cash flow over the past six months. Rising costs and changing consumer behaviour have seen a shrinking profit margin for many businesses, putting a strain on working capital, but conversely, it is also during periods of growth that we see small businesses really struggling with their cash flow.

Top 5 cash flow hurdles

1. Lending Restrictions

It’s a tough time for any small or medium business owner to obtain bank finance with access to working capital becoming harder to come by. Banks have tightened lending criteria making it difficult to obtain loans or raise credit limits.

2. Slow Paying Customers

Many large companies have invoice terms as high as 60 days, which is a long time to wait to be paid after you have delivered your goods or services to your customers. Please consider this when signing contracts and adjust your cashflow forecasting accordingly.

3. Rapid Expansion

Businesses that grow too quickly can find themselves struggling to maintain cash flow. A combination of increased overheads like materials, staff and expanded equipment sees them drain their cash supply to meet orders. Without a cash flow injection these businesses may have to turn away orders as they wait to get paid from the last.

4. Seasonal income

Businesses that raise most of their income in one part of the year can find they run out of funds if they don’t diligently manage their expenses. Businesses making seasonal goods such as beachwear, Christmas items or seasonal rural products are examples of this.

5. Lack of customer credit checks

Many Australian businesses experience cash flow problems because a major customer goes bankrupt, exposing them to bad debt.

Do your due diligence when it comes to customer credit checks and  set reasonable limits  for customers with poor credit history. Avoiding defaults and late payments could stop your business from going broke.

It’s important for business owners to realise that profit and cash flow are not the same thing. You can have a profitable business on paper and not have a dollar in the bank.

Speak to us if you need help with your business’s cash flow.


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After an incredible career dedicated to supporting regional businesses, farming families and rural communities, BMO Business Centre Partner Adrian Rasmussen will officially retire from the partnership effective 30 June 2026. For many across the Western Downs and beyond, Adrian has been far more than an accountant or advisor. Over decades in business, he has built trusted relationships grounded in honesty, loyalty and a genuine understanding of regional life and the people who live it. Adrian’s connection to the country and agriculture has always been at the heart of who he is. He has worked alongside generations of farming families and business owners through seasons of growth, challenge and change, becoming a steady and respected presence for clients, colleagues and the wider community alike. Reflecting on his time at BMO, Adrian said the relationships formed throughout his career have been among the most rewarding parts of the journey. “It has been a privilege to work with so many wonderful people over the years; not only clients, but colleagues and communities who have become lifelong friends,” Adrian said. “Regional communities are built on relationships, trust and supporting one another, and I’m incredibly grateful to have been part of that throughout my career.” BMO Business Centre Managing Partners Kelvin Tyler and Michelle McVeigh said Adrian’s contribution to both the business and the region would leave a lasting legacy. “Adrian has played an incredibly important role in shaping BMO into the business it is today,” they said. “His care for clients, commitment to regional communities and calm, practical approach have earned enormous respect across our industry and the communities we serve. While we will certainly miss having him in the office, we are excited for Adrian and his family as they enter this next chapter.” While stepping away from the partnership, Adrian is looking forward to spending more time with family, on the farm and enjoying a well-earned change of pace after many years dedicated to supporting others. Everyone at BMO Business Centre extends their sincere thanks to Adrian for his years of service, friendship and leadership, and wishes Adrian and his family all the very best for the future.

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