Reset: A smarter way to manage your tax

Cashflow management is crucial in any business environment because it allows you to plan and forecast for the future. Having a clear understanding of your cash inflows and outflows enables you to make informed decisions about when to invest, how much to spend, and how to allocate your resources effectively. However, times are becoming tougher, and undisciplined cashflow management In the current economic environment can lead to significant business stress. This can have impacts on the ability to pay bills, wages, purchase stock, and can ultimately lead to financial distress.

There are a number of ways to manage cashflow, and if I’m honest, discipline is the most effective. (Head in the sand with cashflow management isn’t a great strategy).

Another way to manage your cashflow can be to manage your tax liabilities in a smarter way. This can mean using tax planning solutions like Tax Management NZ (TMNZ), Tax Pooling Solutions (TPS), and Tax Traders. These solutions help businesses manage their provisional tax payments, avoid late payment penalties, and reduce interest costs.

TMNZ, for example, allows businesses to pay their provisional tax at a later date without incurring interest and penalties, providing greater flexibility and cashflow management. TPS enables businesses to pool their tax payments with other taxpayers to reduce the impact of unexpected tax liabilities. Tax Traders, on the other hand, offers businesses the ability to buy and sell tax credits, allowing them to manage their cashflow while optimizing their tax positions.

By using these tax management solutions, businesses can maintain their cashflow and avoid unexpected tax bills, which can cause significant financial strain. This, in turn, allows cash to be invested in growth opportunities, hire new staff, and continue operating smoothly.

Cashflow planning can be stressful, but we here at Sudburys are always here to help. Our team of experienced accountants can provide tailored advice on how to manage your cashflow, optimize your tax position, and minimize your financial risks. Get in touch if you would like to know if tax planning options might be beneficial to your business.