RBizz Corporate Accountants - Resources , Guides

What to Do If You Can't Pay Your Tax Bill on Time

Wed, 15 Jul 2026 19:58:17 +1000

What to Do If You Can't Pay Your Tax Bill on Time

A tax bill you can't pay in full is one of the most stressful moments in running a business — and one of the most common. Cash flow timing, a slower quarter, or an unexpectedly large bill can all leave a business short when a payment is due.

The good news: this situation is far more manageable than most business owners assume, provided it's addressed early. The businesses that get into real trouble aren't usually the ones who couldn't pay — they're the ones who went quiet and hoped it would sort itself out.

What Actually Happens If You Don't Pay

If a tax bill goes unpaid past the due date, two things typically start accruing:

General interest charge (GIC), which compounds daily on the outstanding amount.
Potential compliance action from the ATO if the debt remains unaddressed for an extended period, which can escalate to garnishee notices, director penalty notices, or legal recovery action in serious cases.

Importantly, these consequences scale with how long the situation is ignored — not simply with the fact that a payment was missed. A short delay handled proactively looks very different to a debt left unmanaged for months.

2. Depreciation on Assets

1. Contact the ATO (or have your accountant do it) before the due date

The ATO is generally far more flexible when a business reaches out ahead of time rather than after falling behind. Reaching out early signals that the non-payment is a timing issue, not an avoidance issue.

2. Set up a payment plan

The ATO offers structured payment plans that allow a debt to be paid off in instalments rather than as a lump sum. Eligibility and terms depend on the size of the debt and your compliance history, but this is a well-established, commonly used option — not a red flag on your record.

3. Review your cash flow, not just the tax bill

A missed tax payment is often a symptom of a broader cash flow timing issue. Addressing the root cause — invoicing cycles, payment terms, or seasonal revenue gaps — reduces the chance of the same situation recurring next quarter.

4. Check if remission of interest or penalties is possible

In some circumstances, particularly where there's a genuine and demonstrable reason for the delay, the ATO can consider remitting some interest or penalties. This isn't guaranteed, but it's worth raising as part of a broader conversation with your accountant.

5. Don't ignore ATO correspondence

Letters, SMS reminders, or portal notices about an outstanding debt are far easier to deal with in the first 30 days than after several rounds of escalation. Responding — even just to say a plan is being arranged — keeps the situation manageable.

Why Early Action Changes the Outcome

The difference between a manageable tax debt and a serious compliance problem is almost always timing. Business owners who engage early:

Have more payment plan flexibility
Face lower cumulative interest charges
Avoid escalation to firmer recovery action
Keep the situation as a conversation, not a dispute

You Don't Have to Sort This Out Alone

If you're behind on a tax bill — or you can already see one coming that you won't be able to cover — the earlier you get advice, the more options you have. This is one of the most common situations we help clients manage, and it's rarely as dire as it feels in the moment.

RBizz can help you set up a payment plan, manage ATO communication, and get your cash flow back on track — schedule a free consultation.

Tax Season in Australia: What Companies, Businesses & Sole Traders Need to Know

Thu, 09 Jul 2026 18:18:16 +1000

Tax Season in Australia: What Companies, Businesses & Sole Traders Need to Know

Tax season doesn't look the same for every business. A company, a small business partnership, and a sole trader all sit under the same ATO calendar — but the obligations, paperwork, and risks each one faces can be quite different.

Understanding which rules apply to your structure isn't just about compliance. It's about making sure you're not overpaying, under-preparing, or missing something your entity type is specifically exposed to.

Here's how tax season breaks down across the three most common business structures in Australia.

Companies

Companies face the most structured — and often the most complex — reporting obligations of the three.

What applies to you:

Company tax is a flat rate (currently 25% for base rate entities, 30% for others) — not dependent on the owner's personal income like a sole trader.
Company tax returns are generally due by 28 February for companies not using a tax agent, or later if lodging through a registered agent's program.
Directors have separate obligations, including Director ID requirements and personal liability exposure for unpaid PAYG and SG amounts under the Director Penalty Notice regime.
Franking credits and dividend distributions add another compliance layer if the company pays dividends to shareholders.

What to prepare now: Reconcile trial balances, confirm any Division 7A loan repayments are on track, and review whether retained profits should be distributed or reinvested before year-end.

Businesses (Partnerships & Trusts)

Partnerships and trusts sit in the middle — they lodge a tax return, but generally don't pay tax at the entity level. Instead, income flows through to partners or beneficiaries.

What applies to you:

The entity itself lodges an information return, but tax is paid by the individuals/entities receiving the distributed income.
Trust distribution resolutions must generally be finalised before 30 June — missing this can result in the trustee being taxed at the top marginal rate on undistributed income.
Partnerships need clear, documented profit-sharing arrangements, especially if they've changed during the year.
GST and PAYG withholding obligations still apply at the entity level if registered and employing staff.

What to prepare now: Confirm trust resolutions are drafted and signed before the cut-off, and review partner drawings against actual profit share to avoid surprises at tax time.

Sole Traders

Sole traders have the simplest legal structure — but that doesn't mean the simplest tax outcome, since business income is taxed at personal marginal rates.

What applies to you:

Business income and expenses are reported on your individual tax return (via a business schedule), not a separate entity return.
There's no company tax rate to fall back on — profit is taxed progressively, which can mean a heavier tax burden in a strong year.
PAYG instalments are common for sole traders once income crosses ATO thresholds, meaning tax is paid throughout the year, not just at lodgment.
Superannuation isn't compulsory for yourself as a sole trader, but voluntary contributions can be a valuable tax-planning lever.

What to prepare now: Review whether your income level this year makes moving to a company or trust structure worth exploring, and check your PAYG instalment amount reflects your actual current income.

The One Thing All Three Have in Common

Regardless of structure, the businesses that move through tax season smoothly all do the same three things:

Keep records current, not retrospective. Monthly reconciliation beats a scramble every June.
Know their specific lodgment dates. "Tax season" isn't one date — it's a calendar of dates that differs by structure and lodgment method.
Talk to their accountant before decisions, not after. Structure changes, distributions, and large purchases are far easier to plan for than to undo.

The Getting the Right Structure Working for You Line

Whether you're a company managing director obligations, a trust finalising distribution resolutions, or a sole trader weighing up whether it's time to incorporate, the right guidance early in the year makes tax season a formality rather than a fire drill.

Rbizz Corporate Accountants works with companies, partnerships, trusts, and sole traders across every stage of the tax calendar — schedule a free consultation to see where your business stands.

Tax planning helps you do more with your money

Mon, 06 Jul 2026 10:44:32 +1000

Tax planning helps you do more with your money

Tax planning is a strategic approach to managing your business’ financial affairs, with the aim of legally minimising your tax liability. In other words, you plan ahead to make sure you pay the taxes you should be paying, but not a penny more.

Working with your tax adviser, you can look for deductions, credits, exemptions and tax-saving strategies that will help to optimise your company’s overall tax position.

How does tax planning affect your business?

The primary goal of tax planning is to reduce the amount of taxes your business owes. But it’s also about making sure you stay compliant with all the tax laws and regulations applicable to your business.

But what are the main advantages? Let’s take a look at five of the big benefits of careful, strategic tax planning.

By planning your tax across the year, you can:

How can our firm help you with tax planning?

Getting strategic with your tax planning has many advantages for your financial stability as a business. But to maximise your planning, it’s important to work with an experienced adviser.

As your tax adviser, we’ll help you look ahead across the whole financial year, looking for the opportunities to reduce your tax liability and find the best tax deductions and incentives.

If you’d like to know more about the impact of tax planning, we’ll be happy to explain.

Get in touch to talk about tax planning.

Understanding revenue and the true nature of profitability

Fri, 03 Jul 2026 13:15:14 +1000

Understanding revenue and the true nature of profitability

Healthy sales revenue numbers don't always mean your small business is profitable.

It's easy to mistake rising sales and income for profitability. But unless you understand your operational costs, profit margins and net profit, you won't truly know whether the business is making long-term, sustainable profit.

What is sales revenue?

What is net profit?

What’s the best way to track your profitability?

So, if you’re looking to truly grasp the profitability of your business, relying on a cursory glance at your sales revenue figures is not the best approach.

As we’ve seen, revenue is the total cash your business pulls in from sales. But net profit is what you actually get to keep – it’s the money remaining to pay your directors’ dividends, for reinvesting in the business and for increasing your cash reserves.

Helping your business drive the very best profits

When you’re trading as a business, there are unavoidable expenses, costs, deductions and taxes to pay. So it’s vital to factor these deductions into your financial overview.

Come and talk to our team about tracking your net profit number and adding this all-important metric to your dashboards and regular financial reporting.

Get in Control of Cashflow

Fri, 03 Jul 2026 00:50:51 +1000

Get in Control of Cashflow

It’s a well-worn phrase, but cashflow really is the lifeblood of your business.

When your cash inflows are greater than your cash outflows, that puts you in a positive cashflow position – giving you the liquid cash needed to trade, improve and grow as a business.

But if costs start to outstrip your income, that can leave too little cash in the pot. This results in mounting debt, problems paying suppliers and (in the worst cases) the failure of your business.

So it’s vital to get proactive with cashflow management!

Fast ways to improve your cashflow

Cashflow is an ongoing process, where you need to constantly track, monitor and act on the numbers you see in your regular cashflow statements.

A negative cashflow position can be due to a number of factors, whether it’s insufficient sales, slow payment of invoices or poor cost management. The solution to these issues is to take a proactive and holistic approach to improving the company’s cash situation.

Some key ways to boost your cash position include:

Improve your sales and marketing – creating more sales and boosting income.
Make it easy to get paid – using the latest in payment tech to speed up payment times.
Track and manage debts – chasing any late payments to reduce your aged debt.
Manage spending effectively – and start to track, review and reduce your costs.

Talk to us about improving your cashflow

If cashflow is becoming a headache for your business, we can quickly help you get back in control of your cash position – and attain that all-important positive cashflow position.

Get in touch to improve your cashflow.

AI - Ways to Boost Business Efficiency

Mon, 01 Jun 2026 00:51:00 +1000

AI - Ways to Boost Business Efficiency

It seems as though everyone is using artificial intelligence (AI) these days – and for good reason. When used correctly, AI can be a powerful tool, capable of delivering huge efficiency savings to businesses and individuals alike. But, like any tool, AI needs to be used correctly to get the most out of it.

Ways AI can can help your business grow

Streamline administrative tasks: If there’s one area where AI truly shines, it’s taking basic, time-consuming tasks, such as data entry, and completing them in a fraction of the time. In fact, almost anything administrative can typically benefit from AI assistance. For example, AI can help with generating quotes and issuing invoices to customers, as well as help with email and document management. AI use in these areas can not only reduce the risk of manual error, but it can also free up time for staff to focus on more strategic, revenue-earning tasks.

Improve sales results:AI is very, very good at analysing data. For this reason, businesses looking to grow their revenue might consider using AI to review recent sales data and identify trends in their customers’ behaviour and preferences. This way, businesses can further tailor offerings to their customer base and encourage repeat sales.

Provide customer support:AI chatbots are excellent when deployed to answer simple questions that customers might often ask. What’s more, AI chatbots can run 24/7 customer support, while answering more questions, quicker. While chatbots are good for specific, easy-to-solve customer queries, be very careful using AI for technical or niche issues, as there is a greater risk of the AI providing incorrect advice.

These are just a few examples of how AI can grow your business. In reality, there’s an AI task for almost everything, whether you want a programme that can summarise meeting notes or help with research tasks - the limit is really your imagination!

Keeping AI in check

Ultimately, if AI is deployed in your business with purpose and with a clear goal in mind, it can be a very beneficial tool. However, AI should be viewed as just that: a tool. And as with any tool, there are advantages to AI as well as drawbacks. For example, current AI programs don’t always produce the correct answer when prompted, meaning a manual, human review of AI output almost always remains necessary.

Still on the fence about AI?

AI has so many uses – so many that it can feel overwhelming. If you’re unsure about how to integrate AI into your business, or want to know how it can help you review your financial performance, speak to a member of our team today.

Understanding Your Balance Sheet

Thu, 07 May 2026 23:10:09 +1000

Understanding Your Balance Sheet

To understand the financial position of a business at a specific point of time, look at the balance sheet. The balance sheet may also be called the statement of financial position. Together with the Profit and Loss Statement, and possibly other reports such as the Statement of Cash-flow, these reports provide a complete understanding of the financial position and business performance.

So what’s involved: The balance sheet has three sections: assets, liabilities and equity.

What are Assets?

Assets are things and resources that a company owns. They have current and/or future value and can be measured in currency.

Assets may be subdivided on the balance sheet into bank accounts, current assets, (receivable within one year), fixed assets, inventory, non-current (or long term) assets, intangible assets and prepayments.

These include banks and other financial accounts held, accounts receivable (trade debtors), supplier deposits or bonds, stock on hand, property, equipment, vehicles, investments and intellectual property. All of these can be translated into monetary value.

What are Liabilities?

Liabilities are amounts owed to suppliers and other creditors for goods or services already received. Liabilities may also include amounts received in advance for future services yet to be provided by the business.

Liabilities are generally subdivided into current, (payable within one year), and non-current liabilities.

These include accounts payable (trade creditors), payroll obligations (salaries, taxes, superannuation), interest, customer deposits received, warranties and loans.

What is Equity?

Equity includes owner funds contributed, drawings, retained earnings and stocks. The value of the equity equals assets minus liabilities.

Transactions that affect profit and loss accounts also affect balance sheet accounts. For example, providing a service increases the accounts receivable balance, which therefore increases the equity.

The Balance Sheet Equation

The balance sheet must always balance! Asset value = liabilities + equity.

For example, if you buy a new vehicle for the business at say 50,000, having paid a 10,000 deposit and taking out a 40,000 loan, the value of fixed assets increases by 50k, but the bank asset value decreases by the 10k deposit paid. The value of liabilities increases by 40k loan, thus leaving the balance sheet balanced on both sides of the equation.

The balance sheet equation shows you how much money you would have left over if you paid all your bills and debts and sold all your assets at a given date. This amount is the Owner’s Equity.

Note that the balance sheet equity total is not necessarily how much the business is worth at market value. Assets are listed on the balance sheet at their transaction value, which may be very different from the market value. Some assets may be worth more, and others may depreciate in value. Business value is calculated not just on the balance sheet figures but many other factors.

Need more information?

Talk to us. Get the complete picture of your business performance and financial position, regardless of what stage of business you are at.

The Importance of "Working Capital" for Business Growth

Thu, 30 Apr 2026 12:20:15 +1000

The Importance of "Working Capital" for Business Growth

Many business owners focus solely on profit, but profit doesn't pay the bills—cash does. In 2026’s fast-paced market, understanding your Working Capital is the difference between a business that can seize new opportunities and one that struggles to keep the lights on.

What is Working Capital?

Working capital is the money your business has available for its day-to-day operations. It is the liquid funds used to pay for raw materials, inventory, salaries, and overheads while you wait for your customers to pay you.

The Working Capital Cycle

The "cycle" represents the time it takes to turn your net current assets and liabilities into cash. For example, when you buy stock, that cash is "trapped" until the product is sold and the customer pays the invoice. If your cycle is too long, you might find yourself "asset rich but cash poor."

How to Improve Your Working Capital Position

Optimise Inventory: Holding too much stock ties up cash. Use "Just-in-Time" inventory management to keep only what you need.

Shorten Payment Terms: Instead of 30-day terms, consider 7-day or 14-day terms, or offer a small discount for early payment.

Negotiate with Suppliers: Try to extend your "Accounts Payable" terms. If you can pay your suppliers in 45 days but collect from customers in 15, you have a 30-day "cash cushion."

Audit Your Expenses: Regularly review recurring subscriptions and overheads to ensure no "leaks" are draining your daily operational funds.

Why Working Capital Matters for Scaling

Growth requires an upfront investment in people, marketing, or equipment. If your working capital is tied up in unpaid invoices or dusty inventory, you won't have the "fuel" needed to accelerate. By mastering this metric, you ensure your business remains agile and resilient.

What is your Debt-Service Coverage Ratio (DSCR)?

Mon, 27 Apr 2026 13:24:49 +1000

What is your Debt-Service Coverage Ratio (DSCR)?

Access to finance plays a fundamental role in bringing your business plans to life. But the financial jargon and measurements used by lenders can often feel like a barrier.

One important metric to get your head around is the Debt-Service Coverage Ratio (DSCR) which lenders use to assess your borrowing power.

What is a Debt-Service Coverage Ratio (DSCR)?

At its core, the DSCR measures the available cashflow your business has to pay its current debt obligations. While your balance sheet shows what you own and owe, the DSCR shows whether you are actually generating enough liquidity to cover your interest and principal payments.

From a lender’s perspective, it’s the primary indicator of your company’s financial health and your ability to weather economic downturns without defaulting on your loan.How do lenders use the DSCR metric?

Lenders want to know that you’re capable of repaying the money lent to you. They’ll use the DSCR ratio to gauge the level of risk involved in offering capital to your business.

The DSCR provides a measurement that lenders can use to assess your risk as a borrower:

A DSCR of 1.0 means the business has exactly enough net operating income to cover its debt, leaving no room for error.
A DSCR below 1.0 indicates negative cashflow, suggesting that the business may need to dip into savings or take on more debt to stay afloat – a major red flag for lenders.
A DSCR of 1.25 or higher is typically the gold standard for commercial lenders. If you can attain a high DSCR score, you should have fewer issues accessing funding.

By calculating the DSCR ratio, lenders can decide not just if they should lend to you, but also the terms of the loan. A higher ratio means the risk of default is lower, often leading to lower interest rates and more favourable repayment periods.

How to Calculate Your DSCR

If you’re talking to banks and lenders, it makes sense to calculate your DSCR before any meetings or loan applications, so you’re aware of your potential rating:

The formula is:

DSCR = Net Operating Income / Total Debt Service

Net Operating Income (NOI) is your revenue minus operating expenses (excluding taxes and interest payments).
Total Debt Service is the sum of all your interest, principal payments and lease payments that are due within the financial year.

Calculating and monitoring your DSCR as a business

By monitoring your DSCR regularly, you can make informed decisions about when to expand, when to cut costs and when your business is truly ready to take on new investment.

If you’d like to know more about calculating and improving your DSCR score, come and talk to our team. We’ll be glad to run you through the equations and the proactive steps you can take.

Four Ways to Fund Your Business Growth

Fri, 24 Apr 2026 13:53:36 +1000

Four Ways to Fund Your Business Growth

Starting a business is hard. Growing it can be even harder. Thankfully, there are plenty of different ways to access funds to help your business scale, from relatively low-cost options to ones with higher risks and returns.

1. Debt Finance

Debt financing is the most common route for many entrepreneurs. Traditional bank loans and lines of credit are standard ways to inject cash, but they aren't the only options. Peer-to-peer lending and specific equipment financing arrangements can also provide the capital needed for targeted purchases. Before signing any agreement, ensure your business can handle the repayments—especially if dealing with variable interest rates.

2. Equity Finance

Equity financing involves selling ownership shares in your company to a third-party investor, such as an angel investor or venture capitalist. This allows you to obtain capital without acquiring debt and often provides access to the investor's valuable insights and connections. However, the trade-off is a loss of total ownership and potentially less control over key decision-making.

3. Crowdfunding

Crowdfunding raises funds by collecting small amounts of money from a large number of people, often via platforms like Kickstarter. In rewards-based crowdfunding, you might offer merchandise or services in exchange for contributions. While this can generate quick funds and serve as great marketing, failing to reach a public funding goal is highly visible and can impact your brand's momentum.

4. Self-Funding

Also known as "bootstrapping," this method relies on personal savings, business revenue, and strict cost management to fuel growth. It results in more organic growth and allows you to maintain 100% control, but it carries a higher level of personal financial risk if the business encounters difficulties.

How should you fund your business?

The economic climate has never been tougher to grow a business. If you would like a deeper dive into the best funding options for you, book some time with our team – we’d be happy to help!