Cash flow management means scheduling the money your brokerage receives and pays so it can meet each commitment when it falls due. Build the budget from expected bank receipts, keep tax and clawback reserves separate and check the lowest balance before approving drawings or new spending.
A profitable trail book can still leave you short for payroll. The commission may belong to one earning period while the bank receipt arrives in another.
Separate Commission Earnings From Available Cash
Separate the settlement pipeline, commission earnings and bank cash before deciding what the brokerage can spend. Each figure answers a different question.
| Figure | What it tells you | Spending decision |
|---|---|---|
| Settlement pipeline | Loans expected to settle, with timing still subject to change | Model possible future upfront receipts |
| Earned commission | Commission earned under the relevant agreement | Establish the amount expected from the aggregator |
| Recorded income | Income recognised in the accounting records under the business’s accounting treatment | Assess accounting performance |
| Bank cash | Money received into the brokerage’s accounts | Fund payments after allowing for reserves and commitments |
For example, a hypothetical brokerage records $20,000 of commission income but receives payment after its $10,000 payroll falls due. The profit figure cannot fund that payroll. The owner needs an earlier receipt or available cash already in the bank.
An incorrect cash check adds the pipeline total to today’s bank balance and approves a drawing. A correct check puts each expected commission receipt into its expected payment period, then tests the balance before the drawing. A pipeline total is an estimate of future business, not money held in reserve.
Turn the Reconciled Commission Book Into Receipts
Build the receipt schedule from reconciled statements, then match each expected net payment to the bank. Keep the earning period separate from the payment period so a late receipt does not inflate the wrong month’s recurring income.
Use one row per receipt or payment batch. Record these fields before adding the amount to the forecast:
- Commission type and earning period.
- Gross commission and the GST amount, where applicable.
- Aggregator deductions and net amount expected in the bank.
- Expected payment timing and the evidence for it.
- Claim status, including any disputed or unconfirmed component.
- Actual receipt amount, bank reference and receipt date once paid.
These synthetic records illustrate the bridge into a four-week budget. The gross and deduction figures are assumed cash amounts including any applicable GST. The net amount is the amount forecast to reach the bank.
| Receipt | Earning period | Gross less deductions | Expected receipt | Status and bank check |
|---|---|---|---|---|
| Recurring trail | Prior earning period | $9,000 less $1,000 | $8,000 in week 1 | Reconciled statement, not yet received |
| One-off upfront | Settlements before week 2 | $22,000 less $2,000 | $20,000 in week 2 | Settlement and payment timing assumed |
| Recurring trail | Current earning period | $9,000 less $1,000 | $8,000 in week 3 | Forecast, replace when statement arrives |
| Backdated recovery | Older unpaid period | $2,000 less $0 | $2,000 in week 3 | Written acceptance assumed, not yet received |
| One-off upfront | Settlements before week 4 | $22,000 less $2,000 | $20,000 in week 4 | Settlement and payment timing assumed |
Enter the actual receipt separately when it arrives. If a statement supports $8,000 but the bank receives $7,000, record the $1,000 gap and revise available cash immediately. Put an unresolved claim outside the spending base until its amount and payment timing have evidence.
Track My Trail’s Missing Trail Analysis separates trail that stopped and later returned from discharged loans. It identifies the affected periods and amount for a payment query. Use the commission reconciliation guide for that investigation, then update this receipt schedule with the confirmed outcome.
A recovered $2,000 from an old period adds $2,000 to one week’s cash. It does not add $2,000 to every later trail payment.
Build a Rolling Cash Flow Budget
A cash flow budget sets the receipt and spending plan you approve. A cash flow forecast updates that plan as payment evidence changes. Keep the approved budget beside the latest forecast so a delayed receipt remains visible.
Before starting, gather current bank balances, the receipt schedule and the actual payment dates for wages and other commitments. Obtain the tax reserve assumption from your accountant. Use a separate reserve balance for clawbacks and carry forward any existing liabilities.
- Start with bank cash after separating existing tax and clawback reserves.
- Place expected net receipts into the periods when they will reach the bank.
- Enter operating payments on their due dates, including payroll-related obligations and debt payments where relevant.
- Add planned reserve transfers and owner drawings as separate rows.
- Calculate closing available cash and carry it into the next period.
- Check the running balance at each payment, then extend the forecast by another week after completing the first week.
Business.gov.au’s cash flow statement guidance uses opening cash plus incoming cash less outgoing cash to calculate the closing balance. Its spreadsheet template also supports forecasts using clearly labelled estimates.
Copyable Cash Flow Budget Template
Copy this table into Excel and replace the example figures with your own. Add more columns to cover the brokerage’s planning horizon. Use weekly periods where monthly totals would hide payroll timing.
The hypothetical brokerage starts with $20,000 in its operating account. Separate reserve accounts hold $8,000 for tax and $4,000 for clawbacks. All rows use actual cash amounts including any applicable GST. The example has no debt payments or external tax payments during these four weeks.
| Cash item | Week 1 | Week 2 | Week 3 | Week 4 |
|---|---|---|---|---|
| Opening available operating cash | $20,000 | $10,000 | $12,000 | $6,000 |
| Recurring trail receipts | $8,000 | $0 | $8,000 | $0 |
| Upfront receipts | $0 | $20,000 | $0 | $20,000 |
| Backdated recovery | $0 | $0 | $2,000 | $0 |
| Wages paid | $10,000 | $10,000 | $10,000 | $10,000 |
| Other operating payments | $3,000 | $2,000 | $1,000 | $2,000 |
| Transfer to tax reserve | $2,000 | $3,000 | $2,000 | $3,000 |
| Transfer to clawback reserve | $1,000 | $1,000 | $1,000 | $1,000 |
| Owner drawings | $2,000 | $2,000 | $2,000 | $2,000 |
| Closing available operating cash | $10,000 | $12,000 | $6,000 | $8,000 |
Closing available cash equals opening available cash plus receipts, less operating payments, reserve transfers and drawings. In Excel, use that row formula for each column and link the next opening balance to the previous closing balance. Enter zeros for categories without a payment so the template stays readable.
For the example, receipts arrive first each week. Wages follow, then other operating payments, drawings and reserve transfers. Every week’s payments reduce cash, so the lowest balance is the week 3 closing balance of $6,000. If payroll precedes a receipt, add a separate event row and recalculate the running balance. A positive weekly close can otherwise hide an earlier shortfall.
Keep the wider strategy and start-up assumptions in your mortgage broker business plan. This rolling budget controls what the operating brokerage can pay next.
Set Tax and Clawback Reserves
A cash reserve is money held for a named future need. Separate tax reserves and clawback reserves from ordinary operating cash, then compare each balance with the commitment it must fund.
The example’s fictional accountant has supplied fixed tax transfers totalling $10,000 over four weeks. These are planning inputs, not a recommended tax percentage. The tax reserve grows from $8,000 to $18,000. The assumed clawback transfers add $4,000 to the opening $4,000 reserve, leaving $8,000.
The ATO’s GST accounting guidance discusses separating collected GST and choosing an accounting method. GST timing depends on the accounting basis used. Reconcile the GST figures before setting the transfer using the GST reconciliation process.
Income-tax planning also needs its own assumption. The ATO describes pay as you go instalments as prepayments of expected tax on business and investment income. Your accountant’s schedule must account for existing instalments and other tax commitments, without counting them twice.
A reserve transfer changes where the brokerage holds its money. It reduces available operating cash but creates no second business expense or tax deduction. When a reserve account pays an external liability, record that external payment once in the total-business cash schedule.
For clawbacks, bring the exposure assumption and expected timing from the clawback assessment. Suppose this brokerage allows for an $8,000 exposure. Its opening $4,000 reserve covers half that assumption. The scheduled transfers close the $4,000 gap only by the end of week 4.
At that point the business holds $34,000 across its accounts: $8,000 operating cash, $18,000 tax reserve and $8,000 clawback reserve. If the tax reserve already funds an $18,000 upcoming liability, it has no surplus for drawings. The operating balance must still cover wages and other bills before discretionary spending.
Test Delayed Settlements and Falling Trail
Change one receipt assumption at a time, then combine the changes to see whether the brokerage can still meet its commitments. Use the same opening balances and spending plan so the effect of each change is visible.
The scenarios below retain the example’s reserve transfers and drawings. All scheduled receipts still precede the week’s payments. A negative balance identifies an unfunded payment, not an assumed overdraft facility.
| Scenario | Changed assumption | Lowest operating cash | Week 4 operating close | First unfunded commitment |
|---|---|---|---|---|
| Starting budget | Receipts and spending as planned | $6,000 | $8,000 | None within the four weeks |
| Slower settlements | Week 2 upfront moves to week 4 | Negative $14,000 in week 3 | $8,000 | Week 2 other operating payments, short $2,000 when due |
| Aggregator delay | Week 1 trail moves to week 3 | $2,000 in week 1 | $8,000 | None within the four weeks |
| Reduced trail | Each $8,000 trail receipt falls to $6,000 | $2,000 in week 3 | $4,000 | None within the four weeks |
| Documented clawback | Reserve pays a confirmed $3,000 in week 3 | $6,000 in week 3 | $8,000 | None, clawback reserve funds the charge |
| Combined changes | Delayed settlements, delayed and reduced trail, plus the $3,000 clawback | Negative $18,000 in week 3 | $4,000 | Week 2 wages, short $8,000 when due |
In the settlement-delay case, week 2 opens with $10,000 and receives no cash. Wages use that balance. The next $2,000 operating payment cannot be met. Week 3 then closes at negative $14,000 before both upfront receipts arrive in week 4.
In the combined case, the reduced first trail receipt of $6,000 arrives in week 3 alongside the second $6,000 trail receipt and the $2,000 recovery. Week 1 closes at $2,000. Week 2 closes at negative $16,000, then week 3 reaches negative $18,000. The $40,000 upfront receipt in week 4 restores a $4,000 operating balance, after the earlier commitments have already fallen due.
The documented clawback comes from its dedicated reserve. That reserve has $7,000 after the week 3 transfer and $4,000 after the charge. It closes week 4 at $5,000. The charge reduces total business cash by $3,000 even though operating cash is unchanged.
Use a gross-receipt and separate-charge presentation when the clawback leaves the reserve account. If the aggregator deducts it from a commission payment, reduce that net receipt instead. Any transfer from reserves to operating cash is internal. Count the external charge only once.
Keep client recommendations separate from these cash pressures. A brokerage’s preferred receipt timing cannot justify an unsuitable refinance or a decision against a client’s interests.
Respond to a Cash Shortfall
Respond first with actions you can reverse, while the owner assesses the payments at risk. Work from the earliest unfunded commitment, because a later positive close does not repair a missed payroll.
- Verify the expected receipt against the settlement record, statement and payment advice. Replace an assumed receipt with the supported amount and timing.
- Follow up documented underpayments with the aggregator. Keep an unconfirmed recovery outside the cash available for commitments.
- Defer discretionary spending before placing a new order or renewing an optional service. Record the revised payment timing.
- Review owner drawings before the money leaves the business. Keep drawings separate from staff wages and other obligations.
- Reassess upcoming commitments with the owner and accountant. Confirm what must be paid and whether any payment change is agreed.
For the combined example, cancelling the remaining $6,000 of drawings after week 1 improves the lowest balance from negative $18,000 to negative $14,000. Only the week 2 and week 3 cancellations affect that low point. The week 4 cancellation improves closing cash later.
That leaves a funding problem. The owner and accountant need to assess confirmed funding, the remaining spending plan and the reliability of the delayed receipts. Include repayment costs in the forecast before relying on a facility. An application for funding is not cash available to spend.
For a company facing debts it cannot pay when due, seek specialist advice promptly. ASIC’s guidance for directors identifies poor cash flow and unpaid creditors as warning signs. Funding discussions must not delay advice about possible insolvency.
Review the Forecast Against Actual Receipts
Replace forecast receipts with bank receipts at each review, explain the variance and roll the remaining weeks forward. Record a reason for each change so a timing shift does not become an unexplained fall in recurring trail.
Review the earliest payments more often when cash is tight. Update upcoming settlements, statement deductions and trail changes alongside committed outgoings. Keep the original budget visible while revising the forecast.
Use measures tied to the brokerage’s own assumptions:
- Lowest projected balance, with the payment that creates it and the funding gap before that payment.
- Receipt variance, calculated as actual receipts less forecast receipts for the same period and category.
- Reserve coverage, comparing each reserve balance with its named liability or exposure assumption.
- Cash committed before the next supported receipt, separated from discretionary spending.
For a hypothetical completed run, assume all starting-budget receipts arrive as planned. Operating cash reconciles to $20,000 plus $58,000 receipts, less $48,000 operating payments, $14,000 reserve transfers and $8,000 drawings. Closing available cash is $8,000.
Total business cash reconciles separately. Opening cash across all accounts is $32,000. Add $58,000 external receipts and subtract $48,000 operating payments and $8,000 drawings to get $34,000. The $14,000 moved into reserves stays inside the business and is not subtracted again.
The bank balances must match $8,000 operating cash, $18,000 tax reserve and $8,000 clawback reserve. If the next payments before another receipt are $5,000 of wages, $2,000 rent and a $1,000 supplier bill, the operating balance funds exactly those payments. There is no remaining operating cash for another drawing unless a supported receipt arrives or the owner changes the plan.
