Bookkeepers: preparing a client's file for a business lender

For many small businesses, the bookkeeper is the person closest to the numbers. You see the bank feed, chase the invoices and know which suppliers are being paid late. When a client decides to apply for finance — especially a cash flow loan or line of credit — your reports often carry more weight than the year-end accounts. This guide covers how to prepare them so the lender gets a clear, accurate picture.

Why bookkeepers matter so much to cash flow lending

Lenders offering unsecured cash flow facilities (commonly in the $5k–$500k range) care most about how the business has traded lately. They want to know:

• Is money coming in consistently?
• Is the account well managed — no dishonours, no persistent overdrawn periods?
• Who owes the business money, and are they paying?
• Who does the business owe, and is anything stretched?

Every one of those questions is answered by reports you already produce. That makes you central to a smooth application.

Step one: clean the ledger before exporting anything

A lender reading a messy file assumes messy management. Before you produce reports:

1. Reconcile every bank account and card to the latest statement date
2. Clear the suspense or uncategorised account — a large balance there raises questions immediately
3. Separate personal spending — reclassify private costs to drawings or a director loan account
4. Check the BAS agrees with the ledger — or note why it differs (cash versus accrual, GST timing)
5. Review aged debtors — write off or provide for anything genuinely uncollectable, after checking with the owner and accountant
6. Confirm loan and lease balances match the lender statements

The ATO requires most business records to be kept for five years, so everything you need to fix historical issues should be available.

Step two: produce the core reports

Report	Period	What the lender reads
Profit and loss	Year to date, plus same period last year if possible	Trading trend and margins
Balance sheet	As at the latest month end	Debts, working capital, director loans
Aged debtors	Current	Customer concentration and collection speed
Aged creditors	Current	Pressure on suppliers and the ATO
Bank statements	Last 6–12 months	Conduct, consistency, dishonours
BAS copies	Last 4 quarters or 12 months	Turnover consistency and lodgement discipline

Name each file clearly — entity, report, period — and export to PDF unless the lender asks for spreadsheet data. Our page on how lenders read an aged debtors report explains what they look for in that one.

Step three: add the forecast

A 13-week cash forecast is the single most persuasive extra you can add for a cash flow facility. It shows the deepest point of the gap and when it recovers, which explains both the amount requested and the repayment path. The business.gov.au cash flow statement template is a practical starting point if your software doesn’t forecast.

Keep it honest: use customers’ actual payment behaviour, not their invoice terms, and flag any receipts that are expected but not confirmed.

Step four: write a short note

One paragraph, written by you or the owner, explaining:

• What the facility is for
• What the forecast shows
• Anything unusual in the reports — a large one-off customer, a seasonal pattern, a recent catch-up on BAS

Lenders appreciate context from the person who keeps the books.

When to bring the accountant in

Your reports cover current trading. Some lenders will also want tax returns, financial statements or an accountant’s letter, especially for larger amounts or property-secured loans. Coordinate with the client’s accountant so figures agree — the year-to-date profit you report should be consistent with what the accountant expects for the year. Our guide to what lenders need from accountants is a useful hand-off document.

Red flags to fix (or explain) before the lender sees them

• Dishonoured payments on bank statements — explain each one
• Large unexplained transfers to or from personal accounts
• ATO balance growing quarter on quarter — note whether there’s a payment plan
• One customer making up most of the debtors — explain the relationship and payment history
• Negative equity on the balance sheet — let the accountant explain the cause

Each of these can usually be explained. What causes problems is a lender finding them with no explanation attached.

A one-week preparation plan

If a client tells you they’re applying for finance soon, this order works well:

• Monday: Reconcile all accounts to the latest statement; clear suspense items with the owner.
• Tuesday: Reclassify personal spending; check loan and lease balances against statements.
• Wednesday: Review aged debtors and creditors with the owner; agree any provisions with the accountant.
• Thursday: Export the P&L, balance sheet, aged reports and BAS copies; build the 13-week forecast.
• Friday: Write the one-paragraph note, name the files clearly and send them to the owner (or the specialist, with the owner’s authority).

Some files take less, some more. The point is to do the clean-up before the reports leave your hands, not after the lender asks.

Help your client take the next step

When the file is clean and the forecast is clear, your client is ready. Start an enquiry with them and note that their bookkeeper referred them. No credit check is run when they enquire, their details are linked to one suitable lender rather than broadcast, and a real person calls the client directly. Encourage them to answer accurately — particularly turnover, amount and purpose — so the first lender matched is a genuine fit. Make the referral.