Eight funding signals advisers notice before the owner does

Owners feel cash pressure when the account won’t cover payroll. Advisers usually see it coming months earlier — in the reconciliations, the BAS workpapers and the aged reports. That head start is valuable. A client who hears about a likely gap a quarter ahead can plan; a client who discovers it the week wages are due mostly has to react.

This guide is for accountants, bookkeepers, BAS agents and other advisers. It sets out eight signals that commonly precede a funding need, what each one usually means, and how to raise the topic in a way that’s helpful rather than pushy.

Signal 1: The buffer before payroll is shrinking

What you see: In the bank reconciliation, the balance on the day before payroll is lower each month — or has started dipping into an overdraft.

What it usually means: Receipts are arriving later than wages, or costs have crept up faster than sales. Often an early sign of a working capital squeeze.

What helps: A 13-week cash forecast showing the lowest point. If the gap is temporary, a line of credit often suits.

Signal 2: Debtors are stretching

What you see: The aged debtors total is growing faster than sales, or more is sitting in the 60 and 90-day columns. One large customer has moved from 30 to 60 days.

What it usually means: Profit is being made but not collected. The business is effectively lending to its customers.

What helps: A debtor follow-up plan first; then, if the gap remains, a facility to bridge it. Our page on how lenders read aged debtors explains the link to working capital finance.

Signal 3: The ATO balance is growing

What you see: The activity statement account carries a balance that’s larger each quarter. BAS is lodged but not fully paid.

What it usually means: The business is using GST and PAYG withholding as working capital. It’s common, but costly: ATO interest charges incurred from 1 July 2025 are no longer tax-deductible. The ATO can also pass business tax debt details to credit bureaus once six figures have sat unpaid for three months and the business isn’t working with it on the debt.

What helps: A payment plan, a set-aside routine, or refinancing the balance. Our owners’ page on weighing a payment plan against a loan sets out the options.

Signal 4: Instalments are well behind projected tax

What you see: PAYG instalments were set on an earlier, lower year, but profit has jumped. Your projection shows a large balance due when the return is assessed.

What it usually means: A sizeable tax bill is coming that the client probably hasn’t budgeted for.

What helps: Tell the client now, quantify it, and help them choose between setting aside, varying instalments, a plan or finance. See planning for a projected tax bill.

Signal 5: Supplier terms are being pushed

What you see: Aged creditors growing; suppliers being paid at 60 days instead of 30; credit card balances rising; occasional late fees.

What it usually means: The business is borrowing from suppliers informally. That can damage relationships and lead to stop-supply.

What helps: Understanding why — slow debtors, growth or margin pressure — and addressing the cause.

Signal 6: The owner is propping up the business personally

What you see: Regular deposits from the owner’s personal account, a growing director loan owed by the company to the owner, or business costs on personal cards.

What it usually means: The household is quietly funding the business. That can affect the owner’s personal plans and makes the business’s true position harder to see.

What helps: A conversation about whether a dedicated business facility makes more sense, ideally with the client’s financial planner involved. See financial planners and business borrowing.

Signal 7: Growth is outpacing cash

What you see: Sales up strongly, but the bank balance flat or falling. Stock, work in progress and debtors all growing.

What it usually means: Growth needs funding. Every new dollar of sales is tying up cash before it returns.

What helps: A forecast that maps when growth costs land against when revenue is received, and finance matched to the ramp-up.

Signal 8: Big plans mentioned in passing

What you see: Nothing in the books — yet. But at the end of a meeting, the client mentions a new hire, a second van, new premises or a major contract tender.

What it usually means: A future funding need that hasn’t been costed.

What helps: Asking the follow-up question: “How are you planning to fund that?” Our guides to funding a new hire and buying equipment cover two of the most common.

Reading the signals together

Signals present	Typical interpretation	Suggested response
None	Healthy	Recheck next quarter
One	Isolated pressure	Address the specific issue
Two	A likely funding need within a quarter	Build a forecast; raise funding as an option
Three or more	A gap is close	Raise funding now and help the client prepare

The combinations matter too. A growing ATO balance plus a shrinking payroll buffer is a classic pattern. Stretching debtors plus pushed supplier terms is another. Growth plus personal funding often means an owner who needs a proper facility and doesn’t realise it.

How to raise it without pressure

Clients trust advisers because advisers aren’t selling. Keep it that way:

• Lead with an observation. “Over the last three quarters, the ATO balance has grown each time.”
• Quantify it. “On current trends, it’ll be around $90,000 by March.”
• Ask, don’t tell. “How are you thinking about that?”
• Offer options, not a product. “Some clients use a payment plan, some set aside weekly, some refinance it. Happy to model them.”
• Respect the decision. If the client wants to wait, note it and revisit.

If the client wants to explore finance, our guide to preparing a client for a funding conversation and our adviser referral page explain the next steps.

What not to do

A few habits can undermine the trust that makes advisers valuable:

• Don’t diagnose a funding need from one data point. A single bad month is noise; a trend is a signal.
• Don’t name a lender or product as “the answer”. Present options and let the client choose, with their accountant’s input.
• Don’t wait for the client to ask. By the time they do, the choices have usually narrowed.
• Don’t share client information without consent. Even a casual introduction should start with the client’s agreement.

Building it into your routine

The simplest way to catch these signals consistently is to make them part of an existing rhythm. Our guide to turning the quarterly BAS meeting into a funding check offers a 20-minute agenda built around five numbers that cover most of the signals above. Business.gov.au’s cash flow statement guidance is a useful, neutral resource to share with clients who want to build their own forecasts.

An illustrative example

A hypothetical bookkeeper notices three things in a client’s September reconciliation: the balance the day before payroll has fallen for four months running; a major customer is now paying at 55 days; and the director has deposited personal funds twice. She raises it at the next meeting with a one-page summary, and the owner admits he’s been worried. She builds a forecast showing a low point in six weeks, and the owner, after talking with his accountant, decides to explore a line of credit. The conversation happens six weeks ahead of the gap, not the day before it. The scenario is illustrative.

Help your client act early

When the signals line up, the most useful thing you can do is help your client act while they still have choices. If they’d like to see what’s possible, complete the enquiry with them and note that you referred them, with your name and firm. There’s no credit check when they enquire, their details are matched with one suitable lender rather than broadcast, and a real person calls the client first. Encourage accurate answers about the amount, purpose and any ATO balance so the first match is the right one. Start the referral.