The end of financial year cash crunch, and how to get through it

On paper, many businesses look their best in June. Sales for the year are in, the accountant is talking about a decent profit, and the end-of-year push may have brought in a few extra jobs. Then the bank balance tells a different story, because the profit has been spent on stock, equipment and debtors, and a queue of bills is forming for the first weeks of the new year.

That mismatch, a good year in the accounts and a thin account at the bank, is the classic end of financial year crunch. It’s predictable, which means most of it can be planned for. Where it can’t, a few types of finance fit the gap far better than others.

The bills that land together

The crunch isn’t one bill. It’s a cluster of them falling inside about six weeks. Here’s a typical picture for a small employer; your dates depend on your state, lodgment method and agent.

Timing	Payment or task	Worth knowing
Through June	Super on each pay run	Payday Super allows 7 business days per pay run
Late June	Pre-30 June purchases	Equipment, stock and prepayments to bring deductions forward
1 July onward	Higher wage costs	Annual Wage Review rises generally apply from the opening full pay period of July
Early July	Insurance and licence renewals	Many policies and registrations renew around the new year
Mid July	Single Touch Payroll finalisation	Paperwork rather than cash, but it competes for the bookkeeper’s time
28 July	June quarter BAS	Standard due date; agent clients may have longer
Late July	Payroll tax annual returns	In NSW the 2026 annual return was due 28 July; other states run similar reconciliations

Look at that list and it’s no surprise that a business can be profitable and still short of cash on 28 July.

How Payday Super changed June

Until this year, a lot of employers quietly used the gap between paying wages and paying quarterly super as working capital. June super could be paid as late as 28 July. Payday Super, in force since 1 July 2026, ended that. Each pay run’s contributions must now be sitting in the staff member’s account within 7 business days.

Two consequences for the next end of financial year. First, the cash buffer that used to appear in July has gone, so the crunch arrives earlier and feels sharper. Second, super paid on a late-June pay run may not reach the fund until early July. The deduction for employer super usually follows the date the fund gets the money, so ask your accountant how your final June pay run should be timed if the deduction year matters to you.

Spending for the deduction: worth it?

Every June someone suggests buying the new ute or laptop “for the tax deduction”. Since 1 July 2026 the write-off for small business assets costing under $20,000 has been permanent, and it’s a genuinely handy concession. But a deduction only reduces tax by your tax rate on the cost; it doesn’t hand back the purchase price. A $19k machine bought in a cash-tight June saves part of that in tax next year and costs the full $19k in cash now.

To claim it in a given year, the item must be in use, or installed and ready, on or before 30 June, so a deposit on something arriving in August doesn’t qualify.

If the asset is genuinely needed, financing it with equipment finance usually keeps the deduction available while protecting cash for the July bills. Your accountant can confirm how the deduction works alongside whichever finance structure you pick.

Funding the gap: what fits best

Banks are a very good first stop at this time of year, particularly for established customers with an existing overdraft or facility. A short-term limit increase is often the cheapest fix, and it’s worth asking for in May rather than late July. Where the bank says no or can’t move in time, other options include:

• A business line of credit. Drawn only when needed, repaid as customers pay. Ideal for a predictable crunch that returns every winter.
• A short unsecured loan. Useful for a specific one-off gap, sized on turnover and bank statements. Check the total dollar cost, and whether repayments are daily or weekly.
• Tax debt funding. Some owners prefer to pay the BAS outright with a loan rather than run an ATO plan. Our page on paying a tax bill compares the two.
• Invoice finance. If June billing was strong, those invoices can fund July’s bills instead of sitting idle for a month or two.
• Property-secured loans. For larger needs or when other lenders have declined.

Weighing up a June or July shortfall now? Put the numbers to us: a quick form, and your credit report stays clean.

An illustrative example

A Newcastle civil engineering consultancy with 11 staff turns over about $3.2m. At the end of June its debtors are high, around $640k, because several government clients pay on 30 days from approval. Through May the owners bought two laptops and a survey instrument for the write-off and paid an annual software licence in advance.

Mapping July shows the gap: about $180k of wages and super across two pay runs, a June quarter BAS of $96k on 28 July, and NSW payroll tax for the annual return. Opening cash is $120k, and roughly $260k of debtors are expected by mid-August. The peak shortfall is around $110k for three weeks.

Their bank offers an overdraft increase but needs updated financials the accountant won’t finish until September. Instead, the consultancy arranges a non-bank credit line, taps $115k of it in the last week of July and repays it in August as the government invoices clear. The cost is interest on the drawn balance for a few weeks plus the establishment fee, a far smaller sum than missing payroll or carrying an ATO debt into the new year.

Model your own July with the cash flow gap calculator.

Plan it from April, not 30 June

• List every outflow from June to August with dates, using last year’s figures adjusted for wage rises.
• Push debtors in May and June. Clients finalising their own year are often keen to clear invoices.
• Talk to your bank in May about a temporary limit, while your numbers look their best.
• Decide on equipment by early June, and finance it if cash is tight.
• Ring the ATO before 28 July if the BAS won’t be paid in full, and lodge on time regardless.

Our end of financial year checklist has the full tax-time list, and the page on the Christmas cash flow squeeze covers the year’s other pressure point.

Get ahead of July: talk to us

The end of financial year catches out strong businesses every year, and lenders who understand seasonal cash flow know exactly how to read it. A line of credit or short loan that clears in August is a very different proposition from borrowing to cover losses.

Describing your July takes roughly sixty seconds, and no credit check is triggered by asking. We won’t send your information around a stable of lenders. A person on our team reviews the figures and rings you. Please be precise about turnover, the shortfall and your customers’ usual payment timing, so the option we suggest first is one that fits.

Plan for your July shortfall →