The new financial year has started. For most business owners, July comes and goes without much changing: the same reporting habits carry over, the same gaps in financial visibility remain, and the same opportunities to reset get pushed to another time.
However, the start of a new financial year is one of the best opportunities a business owner has to make meaningful changes. The decisions made in July set the tone for the rest of the year. Here is where we recommend starting.
Set the financial metrics you will actually track
Most business owners track revenue. Some track profit. Very few track the numbers that provide genuine forward visibility into where the business is heading.
In July, decide which metrics you will review consistently across the year ahead, rather than only at year-end. Three worth starting with are:
Gross margin tells you whether the core of your business model is healthy. If it is shrinking year over year, something in your cost structure or pricing needs attention, regardless of how strong revenue looks.
Debtor days measure how long customers are taking to pay. Every extra day means cash is sitting outside your business. A simple focus on invoicing promptly and following up consistently can meaningfully improve your cash position without changing anything else about how you operate.
The working capital ratio tells you whether the business can comfortably meet its short-term obligations. A ratio below 1.0 is an early warning sign that many business owners miss until pressure is already building.
Reviewing these monthly, rather than annually, means problems are caught early, when options are still available.
Build Better Cash Flow Habits from Day One
Cash flow is the number one pressure point for SME in Australia. Yet most business owners only pay close attention to it when something goes wrong.
The start of a new financial year is the best time to build habits that keep cash flow healthy before it becomes a problem.
Invoice on the same day you deliver. Every day between delivering work and sending an invoice adds a day to your cash conversion cycle. Over the course of a full year, delayed invoicing is one of the most common and avoidable causes of cash flow pressure.
Set clear payment terms and follow up consistently. Thirty-day payment terms only work if you follow up when they are not met. Building a simple, consistent process for following up overdue invoices removes the awkwardness and protects your cash position.
Know your cash flow cycle. Understand the gap between when you pay your suppliers and when your customers pay you. If that gap is wide, you are effectively funding your customers. Knowing this number gives you the information to address it, whether through adjusted payment terms, deposit requirements, or a different invoicing rhythm.
Separate your operating account from your tax account. Setting aside a percentage of revenue for tax obligations as you go removes the end-of-quarter scramble and gives you a far more accurate picture of what the business is actually generating on a day-to-day basis.
These are not complicated changes. However, implemented consistently from the start of the financial year, they make a significant difference to how the business feels to run and to what your numbers actually tell you.
Review Your Business Structure
As businesses grow and circumstances change, the structure that was appropriate at the outset may nov longer be the most efficient or protective option.
Whether you operate as a sole trader, a partnership, a company, or a trust, it is worth revisiting your structure at the start of each financial year. Changes in revenue, team size, asset accumulation, or personal circumstances can all affect which structure makes the most sense from a tax and liability perspective.
The 2026 Federal Budget introduced legislation that will affect a lot of small businesses. Such changes including taxing trusts at 30% and amendments to the 50% Capital Gains Tax Discount will create obstacles going forward.
This is not a decision to make alone, but raising it with your advisor in July rather than leaving it for years is the kind of proactive planning that can make a material difference over time.
How Optima Partners can help
At Optima Partners, our business advisory team works with WA business owners across the full financial year, not just at compliance time. A conversation at the start of the year gives you the full year to act on what you learn — identifying opportunities and risks in July is far more useful than discovering them in May, when options are limited and pressure is already building.
A new financial year strategic review typically covers your financial position coming out of the previous year, the goals and decisions you are planning for the year ahead, the metrics worth tracking, and any structural or tax considerations relevant to your circumstances. Whether you want to review your reporting structure, reassess your business structure, or simply start the new year with a clearer picture of where your business stands, we welcome the conversation. Book a Strategic Review with Optima Partners.
