Optimising Cash Flow Through Effective GST Management

Effective GST management serves as a powerful lever for improving cash flow in your business. By strategically managing GST payments, input tax credits, and overpayments, CFOs and CEOs can ensure their cash flow remains robust, even in challenging times. 

Here are three key strategies to consider: 

• Optimise Payment Timing: The timing of your GST payments can significantly impact cash flow. If your business is eligible, consider using the cash accounting method for GST, where you only pay GST when you receive payment from your customers. This can help align your tax obligations with your actual cash inflows, reducing the strain on your finances. 

• Maximise Input Tax Credits: Ensure you’re claiming all eligible input tax credits (ITCs) to reduce your GST liability. Regularly review your purchases to identify potential credits, and maintain accurate records to support your claims. Properly managing ITCs can lower your overall GST payable, freeing up more cash for your business. 

• Manage Overpayments Proactively: Overpaying GST can tie up funds unnecessarily. Regularly reconcile your accounts to identify and correct any overpayments. If an overpayment occurs, promptly apply for a refund from the ATO or offset it against future GST liabilities. Keeping a close eye on overpayments ensures that your cash flow isn’t hampered by avoidable tax issues. 

In conclusion, optimising GST management isn’t just about compliance—it’s a strategic tool for enhancing cash flow. By carefully timing payments, maximising input tax credits, and diligently managing overpayments, businesses can maintain stronger cash flow, providing more flexibility to invest, grow, and navigate economic uncertainties. 

 

BTG can help.    

BTG International is a leading indirect tax firm with strong capabilities around GST data integrity, advisory, risk management and governance, and compliance. We have worked with some of the worlds most respected companies and significantly enhanced their indirect tax function. 

Call us today on  1300 650 258, email contact@btgi.com.au or leave your details and we will be in touch.