Sydney CPA: Boost Cash Flow, Liquidity & Working Capital

9+ years of recognition (Multiple Finalist positions) Australian Accounting Awards finalist Graham Chee, FCPA, leverages 25+ years of experience in Discover how a Sydney CPA firm uses AI-driven cash flow automation to improve liquidity and unlock working capital. Get practical frameworks, benchmarks, and an action plan to stabilize cash and fund growth. to help Australian SMEs succeed.

Written by Graham Chee, FCPA (Fellow of CPA Australia – top 5%) and Business Valuation Specialist, this guide distils proven, recognised practices gained from advising 500+ Australian SMEs over more than two decades build rolling cash flow forecasts and budgets. You will learn how AI-enabled cash flow automation strengthens liquidity, shortens the cash conversion cycle, and funds growth without unnecessary risk. We will cover practical frameworks, industry-informed benchmarks, and a clear action plan that CFOs, founders, and professional services principals can implement with confidence.

AI-enabled forecasting and control - Connect your accounting system and bank feeds (Xero, MYOB, or QuickBooks Online) to an AI-driven forecasting tool. The model learns customer payment habits, supplier cycles, payroll timing, tax schedules, and seasonality to produce weekly cash projections. - Automate debtor prioritisation. The system ranks invoices by risk and value, then creates a call-and-email cadence for the collections team. It also recommends early-payment discounts where margin allows. - Simulate what-if scenarios. Test the impact of price changes, revised terms, inventory reductions, and new hires on cash runway before you commit.

Working capital playbook by business model - Professional services and advisory: Implement milestone or progress billing, schedule weekly WIP to bill reviews, and adopt 7 or 14-day terms with automated reminders. Track DSO by client and matter. Use AI to flag scope creep and delayed approvals that slow billing. - Construction and trades: Align claims to contract milestones, manage retentions with a clear release schedule, and standardise variations processing. Use AI to predict slow-paying principals and adjust progress claim timing and follow-up. - Wholesale, distribution, and e-commerce: Reduce DIO with ABC inventory analysis, safety-stock logic, and reorder points driven by actual demand. Offer structured terms to strategic customers while negotiating 45–60 day terms with major suppliers when appropriate. - Healthcare and clinics: Leverage automated gap payments, real-time claim resolution, and daily bank reconciliation to tighten cash. Forecast clinician schedules and patient throughput to plan staffing and supply purchases.

Governance that moves the needle - Cash war room, weekly: Review the 13-week cash forecast, top 20 debtors, critical suppliers, and upcoming compliance payments. Assign owners to specific actions and track outcomes. - Policies and controls: Enforce purchase orders for spend control, standardise quote-to-cash and procure-to-pay processes, and align incentives to working capital KPIs. - Funding mix: Use the cheapest capital first. Consider invoice finance selectively for large, reliable invoices; use overdrafts for short-term timing gaps; match asset finance to asset life.

Benchmarks to guide decisions (adjust by industry) - Current ratio: 1.3 to 2.0 is often a healthy range for many SMEs; the right target depends on volatility and growth plans. - Quick ratio: 1.0 to 1.5 for services; inventory-heavy businesses may operate lower with careful control. - DSO: Services 30 to 45 days; construction can be 45 to 75 days given progress claims and retentions; aim to trend down over time. - DPO: 30 to 45 days is common. Negotiate 45 to 60 days with strategic suppliers where feasible and commercially sensible. - DIO: Highly variable by sector. Use ABC classification and trend reductions month-on-month rather than fixed targets. These are guides, not rules. Your optimal targets depend on industry, bargaining power, seasonality, and growth stage.