How to find your cash gap before it finds you

Most cash crunches don’t come out of nowhere. They’re visible weeks in advance to anyone who lines up what’s coming in against what’s going out. The problem is that few owners have the time, or the habit, to do it. So the crunch arrives as a surprise on a Wednesday, two days before payroll.

This guide gives you a simple, repeatable way to see your cash gap early, size it in dollars and days, and decide what to do about it while you still have choices.

What exactly is a cash gap?

A cash gap is a period when the money in your business account falls below the level you need to operate comfortably. It has two measurements:

• Depth: how far below your comfortable minimum the balance falls, in dollars.
• Length: how many days it stays below that line.

A $15k gap that lasts four days is a very different problem from a $15k gap that lasts seven weeks. The first might be fixed by moving one supplier payment. The second needs a plan, and probably funding.

Notice the gap is measured against your minimum buffer, not against zero. If the account hits zero, you’re already bouncing payments. The goal is to see trouble while there’s still room to move.

Step 1: Pick your window and your buffer

Window. Forecast eight to thirteen weeks ahead, broken into weeks. That’s long enough to catch the next BAS date, a quarterly bill or a slow-paying customer, but short enough that your estimates mean something.

Buffer. Decide the lowest balance you’re comfortable with. A practical starting point for many small businesses is one pay run plus the essential bills for the following week. If your income is lumpy or seasonal, go higher.

Write the buffer at the top of the page. Everything else is measured against it.

Step 2: Start with today’s real balance

Use the actual cleared balance in your business account (or accounts) today. Not the figure in your accounting software if it’s out of date, and not including money you’re “sure” will arrive tomorrow. Tomorrow’s money goes in the forecast, on tomorrow’s line.

Step 3: List the money coming in, on the date it will really land

This is where most forecasts go wrong. Owners write down the date on the invoice. Customers pay on their own schedule.

For each expected receipt, ask:

• Who’s paying, and how much?
• When is it due?
• When does this customer actually pay? Look at their last few payments.
• Is it certain, likely or hopeful?

Then use the realistic date. If a customer on 30-day terms typically pays on day 48, put it in week seven, not week five.

Source	Amount	Invoice due	Realistic date	Confidence
Customer A	$22,000	10 Nov	24 Nov	Likely
Customer B	$8,500	15 Nov	15 Nov	Certain
Card and cash takings	$6,000/week	Weekly	Weekly	Certain
Insurance claim	$4,200	Unknown	Mid-Dec?	Hopeful

Illustrative figures only.

Leave “hopeful” money out of your main forecast. If it arrives, that’s a bonus.

Step 4: List every bill going out, on its due date

Go through your bank statements for the last two or three months and list every outgoing:

• Wages on each payday
• Super, which from 1 July 2026 must reach employees’ funds within 7 business days of each payday under Payday Super
• Rent and outgoings
• Loan, lease and equipment repayments
• Suppliers, on their terms
• BAS on its due date (quarterly lodgers: 28 October, 28 February, 28 April, 28 July)
• Insurance, registrations and subscriptions, especially annual ones
• Owner drawings, because they’re cash leaving too

Don’t round down. If the electricity bill varies, use a typical high month.

Step 5: Track the running balance week by week

Now lay it out:

Week	Opening	In	Out	Closing	vs buffer
1	$31,000	$14,500	$21,000	$24,500	Above
2	$24,500	$6,000	$19,500	$11,000	Below by $9,000
3	$11,000	$28,000	$21,000	$18,000	Below by $2,000
4	$18,000	$6,000	$34,000	–$10,000	Below by $30,000
5	–$10,000	$30,500	$9,000	$11,500	Below by $8,500
6	$11,500	$6,000	$8,000	$9,500	Below by $10,500
7	$9,500	$28,000	$8,000	$29,500	Above

Illustrative figures only; buffer set at $20,000.

In this example, the gap opens in week 2, bottoms out at $30k below the buffer in week 4 (when a BAS and a payroll land together), and closes in week 7. Depth: $30k. Length: about five weeks.

If you’d rather not build the table yourself, our cash gap calculator does exactly this from a list of amounts and dates, and shows the deepest point and how long the gap lasts.

Found a gap you can’t close on your own? Tell us its size and length and a real person will help you work out the cleanest bridge.

Step 6: Stress-test it

Your forecast is a best guess. Before acting on it, change one thing at a time:

• Your biggest customer pays two weeks late. How much deeper and longer does the gap get?
• Sales drop 15% for a month. Does the gap appear earlier?
• A large unexpected bill arrives. A repair, an audit, an insurance excess.

If a single late payment turns a small gap into a large one, you’re more exposed than you thought, and it’s worth building a bigger buffer or arranging standby funding before you need it.

Step 7: Decide what to do

Once you know depth and length, the options become clearer.

Free or cheap levers first:

• chase overdue invoices and ask big customers for a firm payment date
• ask for deposits on new jobs and invoice the moment work is done
• move supplier, rent or loan due dates out of the crunch week
• delay non-essential spending until after the gap closes
• pause owner drawings for a few weeks, if you can

business.gov.au’s cash flow guide recommends comparing estimated and actual income and costs regularly to identify shortfalls, and getting professional help when you need it. Your accountant or bookkeeper can sanity-check your forecast.

Then funding, matched to the shape of the gap:

Gap shape	Usually suits
Short and shallow, recurring	Business cash line
One-off, clear end date	Short-term cash loan
Deep, longer, with property available	Property-backed cash
Caused by the BAS each quarter	A tax set-aside plus a line; see the BAS quarter crunch

Borrow close to the depth of the gap, for roughly its length, with a small margin for things running late.

How do you keep it current?

A forecast you built once and never updated is a historical document. Ten minutes a week keeps it useful:

1. Replace last week’s estimates with what actually happened.
2. Add a new week at the end.
3. Update any receipts whose dates have changed.
4. Check where the gap now sits.

Pick a fixed time, such as Monday morning before the week gets going, and protect it. Many owners find this one habit removes most of the cash stress from their week, because surprises become rare.

Common mistakes

• Using invoice dates instead of realistic payment dates. The most common error by far.
• Forgetting irregular bills. Annual insurance, registrations and quarterly BAS. Our page on annual bills lists the usual suspects.
• Leaving out GST and PAYG. That money isn’t yours to spend; it belongs to the BAS.
• Ignoring owner drawings. They’re real cash leaving the business.
• Measuring against zero. By the time you hit zero, it’s too late.

A note on profitable businesses

It’s entirely possible to find a cash gap in a business that’s making good profits. Growth, slow payers, stock and tax timing all pull cash away from profit. If that’s you, our guide to being profitable but cash-poor explains where the money hides.

You’ve found the gap. Here’s the next step

The hardest part of a cash gap is not knowing it’s coming. Now you do, you have time, and time is what makes options cheap. If your forecast shows a gap that the free levers won’t close, that’s a perfectly ordinary reason to talk to us.

Tell us roughly how deep the gap is, how long it lasts and what’s causing it. The enquiry takes about a minute and there’s no credit check involved in asking. We don’t spread your details around a list of lenders, and a real person who understands cash timing reads it and calls you to talk it through.

The more accurate your figures on the form, the better the first conversation will be, and the more likely we can match you to the right bridge on the first go.

See if you qualify →