How to ask customers to pay their outstanding balance during COVID-19 (+ email template to get paid now)

How to ask customers to pay their outstanding balance during COVID-19 (+ email template to get paid now)

COVID-19 has changed trade as we know it, perhaps forever. What hasn’t changed is your need to get paid on time. However, it’s the suppliers who engage in connected and empathetic communication with their customers now who will reap long-term rewards.

And it’s not just about recovering cash, says Amanda Lee. Amanda is an overdue accounts receivable specialist at The Retriever and has more than 15 years’ experience helping businesses turn late payers into highly profitable, return customers who pay on time.

“For businesses to recover from these extreme times, they will need their customer relationships intact and lines of communication open. The goal is always to collect the outstanding balance and retain a happy customer,” says Amanda.

“If you don’t retain your customers through COVID-19, you may not survive this pandemic, so it’s vital that you’re talking to them.”

Amanda Lee

Key points:

Here is Amanda’s advice on how to ask customers to pay their outstanding balances:

1. First check that you’ve delivered. If you’ve done great work, always expect to be paid!

2. Acknowledge that times have changed. Express your understanding and solidarity with your customers in a genuine manner. We are all in this together.

3. Focus on people. Put people and the relationship first and the money will follow.

4. Invite a conversation. Ask your customers to communicate with you and be available to take their call.

5. Be upfront about the outstanding balance. Remind your customer about the full amount owing. Be straightforward and polite—it’s okay to ask!

6. Remind customers of stimulus available: Eligible businesses will be able to access government cashflow boosts and other stimulus measures to pay their bills. Ask them if they have applied for these incentives.

7. Negotiate for a win:win. A payment plan can help retain a customer whose cashflow is constrained. Reducing credit terms can also reduce your credit risk if you continue supply.

8. Keep communicating. A series of reminders works. Make sure they continue to be helpful and map a way closer to payment. Always ensure your communications are encouraging a connected relationship.

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A 4-step plan (+ outstanding balance email template)

Step 1. First, deliver great work

If your customer has any disputes about their outstanding balance, your reminder communications will not be effective. The first step is to address any disputes immediately, hear the customer’s grievance and accept any responsibility so a resolution is immediate. Then agree on the amount to be paid.
Step 2. Send a reminder that is simple, polite, empathetic and invites a conversation. 

Personalise and customise Amanda’s email template to collect an outstanding balance:

Subject: Your Account and COVID-19 -How Do We Help?


Hi {Name},

How are you? I hope my email finds you well.

We are trading in unusual and interesting times that are impacting us all in similar ways. We want to communicate with you regularly to stay abreast of any issues you may be facing.

I want to discuss your account that has an overdue balance totalling {$0,000.00}. If you’re experiencing financial difficulties or waiting for government assistance, such as JobKeeper, which may delay your payment of the account, please call me on {0000 000 000} so we can discuss an amicable and workable solution to get through the next few weeks. This will assist us in managing our cash flow as well.

It’s vital that we work together through this extreme event and continue to support each other; communication is key. It is important to us that our customers are okay, and we’re committed to doing what we can to support you whilst maintaining our own operations.

I appreciate you giving this your attention and I look forward to your payment or communication.

Take care and enjoy your week.

Attachment: {Account Statement}




{Landline | Mobile | Email}

Friendly reminder email template about outstanding balance

So what does this template get right?

It’s personal—note that it is addressed to a person and not signed off from a generic name like ‘accounts’. The tone is open and friendly. There are lots of ‘I’ and ‘we’ statements that remind the customer of your shared relationship.

It’s timely—the email references current times and sets the scene for communication over the coming weeks.

It’s offering support—support to work together, support for each other’s cashflow, and it expresses genuine concern and interest in how the customer is faring.

It’s actionable—the customer has enough information to understand your point of view and also has a clear and open invitation to return the communication.

Step 3. Follow-up

You’ve invited a conversation, now allow your customer time to respond. Your customers may be working differently and their response times may be longer. Alternatively, your customers may now have more time for an in-depth conversation.

Either way, be prepared to follow-up. Test out different communication channels. You may find that a text message gets answered more quickly. This letter (above) gives you a point of reference to refer back to in your future communication.

Remain persistent and consistent in your follow-ups. Now is the time to stay on your customer’s radar and keep collecting. As stimulus payments flow through the supply chain from May to September, use this time to position your business as a preferred supplier at the head of the payments queue.

Step 4. Make permanent changes to your accounts receivable process

At ezyCollect, we have seen a rise in financial controllers and credit managers eager to use this time to make permanent improvements to their accounts receivable process and efficiency. The COVID-19 pandemic has opened everyone’s eyes to new and improved ways of working and relating to their customers.

What’s more, business operators are more aware than ever before of the critical role that accounts receivable plays in the cash flow cycle. Businesses that have cash locked away in unpaid invoices are now acutely aware of the deficit in their working capital. You cannot maintain a status quo of carrying significant overdue accounts if you want to remain in business in the near future.

In summary

Keep up, in fact, ramp up, your collection efforts during COVID-19, especially while government- assisted cash is flowing through the supply chain. Excellent communication is always key to getting paid on time and maintaining respectful customer relationships. Tailor your communications to empathise with current times. Open the lines of communication. Negotiate payment plans that support cash flow and the trade relationships you want to maintain. Customer retention is vital.

It’s crucial to make permanent improvements to your collections efficiency so you maintain a healthy cashflow buffer to fund the tough times and your plans for growth. COVID-19 has taught us all that anything can happen and we have to prepare ourselves for a new future.

To learn more about our accounts receivable solutions and how you can optimise your collections, watch a free demo below.

How to collect unpaid invoices during COVID-19: Debt collection webinar

How to collect unpaid invoices during COVID-19: Debt collection webinar

COVID-19 has spun business on its head. While some businesses are powering on, others are scrambling to survive.

Importantly, a customer’s obligation to pay for goods and services that you have provided has not changed. Your process to collect debts should adapt if it needs to, but it should continue. Overdue invoices are an unnecessary cash flow burden that few businesses can afford to carry right now.

Andrew Smith, CEO, ARMA

In a recent webinar [15 April 2020], the debt collection specialists from ARMA shared their expertise on how creditors can work with their customers to get paid during COVID-19. (You can watch the full webinar at the bottom of this page).

ARMA’s CEO, Andrew Smith, and Head of Sales, Eddie Smith, have hundreds of conversations each day with creditors and their debtors, and offer this advice:

Key points:

  • Be honest, open and compassionate with customers

  • Mix up your communication channels

  • Communicate frequently

  • Use pre-legal options such as demand letters

  • Seek extra protection on your credit

  • Future-proof your collections process

Trial ezyCollect for 2 months free during COVID-19

Be honest, open and compassionate with customers

Suppliers want to maintain strong relationships with their customers. But relationships can deteriorate when debtors prolong payment times without agreement. As a creditor, be honest with your customers about your payment expectations—it permits your customers to be open and honest with you in return.

For example, start a debt collection conversation the same way that you hope someone would speak with you. Ask your customer how they have been impacted by the current pandemic situation. Listen, and share your understanding. Then let your customer know that you need to understand how they intend to start paying your overdue invoices.

Additionally, be prepared to accept payments in instalments and to negotiate ongoing credit terms. This way, you map a way forward for your customer to repay outstanding invoices. You also put more protection around future credit that you may extend to them.

Mix up your communication channels

It’s not business as usual for most of us. Your customer may close their office and work different hours from home. Try contacting your customers via text message, email, and phone. Pay attention to how your customers are responding, then adapt to their preferred channel, even if it’s not your preference.

For example, while Andrew likes to call debtors and speak with them over the phone, he sees a high response rate from text messages as people reply after hours. Give people a little extra time to respond, as your customers may also be looking after their children at home during the day.

Communicate frequently

The business payment landscape is changing rapidly, even daily. As stimulus packages start to roll out, businesses that were hanging on to their cash last week will soon have cash on hand to pay their bills. 

Therefore, don’t be shy about staying in touch with your customers and politely pursuing the payment conversation. As Andrew points out, the purpose of the stimulus packages is to keep businesses trading and that includes paying their bills. 

In fact, your communication can be really helpful to customers right now, especially if you can share how they can access stimulus packages available to them. 

You can download a one page summary of Australian stimulus packages here: Stimulus and Assistance Guide for Individuals and Businesses.

Remember, communicate consistently and politely, don’t harass or intimidate. For more information on debt collection guidelines from the Australian Competition and Consumer Commission (ACCC), read our post here.

Yes, you can still send a demand letter

While the Australian Government has temporarily changed debt collection laws as a coronavirus response, pre-legal avenues are unchanged. In fact, they are more important than ever, says Eddie.

Regardless of COVID-19, paying a bill when it falls due it still a requirement of your credit terms and the law. (Some companies are freezing billing on mortgages, energy etc.)

As debt recovery experts, Andrew and Eddie know for a fact that invoices become harder to collect as they age. Their advice is to bring forward your threshold for sending a demand letter; if you used to wait for 90 days overdue, bring it forward to 60 days or sooner. 

At ARMA, they have changed the wording of their standard demand letter to assure debtors that there are extra options for them to settle their account.

Try wording such as:

We understand that your business may have been affected by COVID-19, and we can provide you with additional options to assist your payments throughout this period. 

We request that you contact our customer service team on <<Phone Number>> to provide further information to enable us to assist you. 

Failure to contact us will result in this account proceeding to our debt collection agency.’

Seek extra protection before extending new credit

If you don’t already have these measures in place (don’t panic, many businesses don’t), consider adding these conditions to your new contracts so you have more options to recover any debt if a customer’s business fails:

  • Personal Guarantees, Director Guarantees: If your customer fails, your business can pursue the personal guarantor or business directors to recover any losses.

  • PPSR: A national register where you make a claim to retain an interest on goods that you have supplied but not yet been paid for.

  • Caveats: Claiming an interest in a debtor’s personal property as security over credit you have extended.

  • Lodge a credit default: List a default on a customer’s credit report with a commercial credit bureau.

  • Costs Clause: Include a clause in your contracts stating that your debtor is responsible for specified costs you incur to recover the debt.

In Eddie’s experience, creditors hesitate to ask their customers for these assurances, but his advice is simple: Have the conversation upfront.

It’s not too late to go back to existing customers and negotiate new terms. Help your customers to understand that you want to keep trading them but need further security if their payment behaviour has been deteriorating. You’ll be surprised to know how many customers will accept greater controls so they can keep trading with you and avoid going on credit hold or being referred to the courts.

Seek legal advice on any contractual changes.

Future-proof your collections process

Learn from what’s happening now and put more safeguards around your debt collection for future uncertainties.

  • Enhance your capacity to communicate digitally with your customers.

  • Update your customers’ contact details, including business identifiers such as ABNs and business addresses, so that if you need to pursue customers, you know how to find them.

  • Improve your overdue invoice tracking system so that you have high visibility of your ageing invoices.

  • Automate the collections process as much as you can so you create time for meaningful conversations and customer relationship management.

  • Rigorously monitor the financial health of your customers with services like credit risk monitoring. Don’t just rely on your customer’s word.

  • Review your contracts and terms and conditions to get better security over your goods and services.

  • Be prepared to stop supply if customers exceed their limits or terms.

Watch the full 1-hour webinar below. (Note that offers included in this webinar expire 30 April 2020).

ezyCollect and ARMA webinar 15 April 2020: What are your options if your customers stop paying you?

Get started on ezyCollect’s credit management and accounts receivable platform for free:

New debt collection laws: How they affect your business

New debt collection laws: How they affect your business

Under temporary new Australian laws relating to corporate debt collection, creditors still have the right to enforce debts through the courts but the thresholds have changed. In response to the economic fallout from the coronavirus pandemic, the new laws will remain in place for the next six months, with the option to extend to a year.

Key points:

As of 23 March 2020, amendments to the Corporations Act 2001 (Cth) and the Bankruptcy Act 1996 (Cth) allow the following temporary relief for companies in financial distress:

  • The statutory minimum debt is increased from $2,000 to $20,000.

  • The statutory period to comply with a statutory demand is extended from 21 days to six months.

  • Safe harbor for company directors from any personal liability for trading while insolvent.

  • The minimum amount of debt required for a creditor to initiate bankruptcy proceedings is increased from $5,000 to $20,000.

Creditors can still pursue unpaid invoices

Creditors can still pursue pre-legal collections as before. In fact, a business’ internal accounts receivable process should be more robust than ever in these uncertain times. Now is the time for a business to review its credit policies and the credit terms it extends to customers. In another article, we’ll cover options for businesses when your customers stop paying their invoices during the COVID-19 pandemic. In the meantime, you can register for our upcoming webinar:


Date: Wednesday 15 April 2020
Time: 11.30 a.m. to 12.30 p.m. AEST
How to join: Via Zoom

What are statutory debts and statutory demands?

A debt is considered statutory if it is due and payable to a creditor and is claimed by the creditor under a statutory demand. The debt cannot be prospective, contingent or unliquidated.

Due to the Australian Government’s Coronavirus Economic Response, the statutory minimum debt is now $20,000. 

The revised statutory minimum debt of $20,000 only applies to statutory demands that are served on or after the commencement of the temporary changes and only while the temporary laws are in place.

Under the Corporations Act,  a statutory demand must be in writing and in the correct form: Form 509H.

A Form 509H is a written demand for payment sent by or on behalf of the creditor to the debtor company. It must include relevant information and be delivered according to the requirements of the Corporations Act. This is because the Courts can order a company into liquidation if it does not meet the statutory demand, so the Courts must be satisfied that the initial statutory demand was lawful.

A single statutory demand can include the total debts owed to the creditor and how the debts were incurred by the debtor company.

Among other criteria, the statutory demand must ensure the following:

  • is in writing;

  • be signed by on behalf of the creditor;

  • state the total amount of debt due and payable on the date of the demand;

  • includes the debtor’s company name and its registered office. 

  • includes an Australian location where the debtor company can pay the debt e.g. the creditor’s office or a solicitor’s premises. 

  • must be supported with a judgment of the Court or an affidavit

  • is left at or posted (not emailed) to the debtor company’s registered office or a copy delivered personally to a company director who resides in an Australian territory. 

Due to the compliance requirements, a creditor company will usually ask a solicitor to prepare and issue a statutory demand on its behalf.

Responding to a statutory demand

Time is critical for a debtor company once it has been served with a statutory demand. 

The statutory period to comply has changed due to the Australian Government’s Coronavirus Economic Response.

From 23 March 2020, the statutory period to comply with a demand is extended from 21 days to six months.

A debtor company may choose a number of actions after receiving a statutory demand:

  • Pay the creditor the amount in demand.

  • Seek to set aside a statutory demand that is accompanied by an affidavit.

  • Seek to set aside a statutory demand with a judgment.

A debtor company that seeks to set aside the statutory demand must be able to provide the Court with satisfactory evidence that there is a genuine dispute, they have an offsetting claim, the demand has formal defects, or there is another valid reason.

If a statutory demand is set aside by the Courts, there is no further legal effect of the demand and the Court may issue costs against the issuing creditor.

What is safe harbour from insolvent trading?

When a company has no capacity to pay back its debts when they are due, company directors have a personal responsibility to enter an insolvency procedure such as voluntary administration or liquidation.

The new temporary laws allow company directors to knowingly continue trading and incur debt even if the business is unable to pay its debts when they are due. Any debts incurred by the company will still be payable, once economic conditions improve. 

The new laws are intended to support businesses to continue to trade with purpose where possible through the Coronavirus crisis with the aim of returning to viability afterward. Directors are not relieved of their fiduciary, care and diligence responsibilities and must take care to fully  understand their director responsibilities before, during and after the Coronavirus pandemic. Companies that undertake dishonest or fraudulent practices will still be subject to criminal penalties. 

An increase to bankruptcy thresholds

Bankruptcy refers to personal, not company, insolvency. Under temporary changes to the Bankruptcy Act 1996 (Cth),  the creditor can initiate bankruptcy proceedings against a debtor when the minimum amount of debt is $20,000. 

A debtor now has six months (up from 21 days) to respond to a bankruptcy notice filed against them. Creditors retain the right to enforce debts against companies or individuals through the courts.

Planning for the future

The breathing space offered by the temporary relief measures is designed by the Australian Government to allow businesses more time to consider their recovery plans after the Coronavirus crisis. The government hopes that the safety net of extra time and lessening the threat of court actions will support otherwise viable businesses to resume normal business  operations instead of pushing them to insolvency.

Useful resources:

Read Treasury’s Fact Sheet: Temporary relief for financially distressed businesses

Read the ATO’s advice: Boosting cash flow for employers

Throughout the Coronavirus pandemic, ezyCollect is offering new users 2 months free use of the entire accounts receivable platform to help businesses recover outstanding invoices and mitigate credit risks.

JobKeeper explained: Income support to keep jobs

JobKeeper explained: Income support to keep jobs

*Updated 22 July 2020 following amendments by the Australian Government on 21 July 2020*

  • Existing JobKeeper payments remain in place until 27 September 2020.

  • An amended JobKeeper scheme will apply for a further six months to 28 March 2021: December 2020 quarter (28 September 2020 to 3 January 2021) and March 2021 quarter (4 January 2021 to 28 March 2021).

  • The payment rate will be reduced and eligible hours of work apply. Other eligibility criteria remain unchanged.

  • The ATO will determine an organisation’s eligibility to receive JobKeeper in the December 2020 quarter by applying the GST Turnover Test to the June and September 2020 quarters.

  • In the December 2020 quarter, JobKeeper drops from $1500 per fortnight to $1200 per fortnight. Employees who were employed for less than 20 hours a week on average before the onset of COVID-19 (1 March 2020) will receive $750 per fortnight.

  • In the March 2021 quarter, JobKeeper drops from $1200 per fortnight to $1000 per fortnight. Employees who were employed for less than 20 hours a week on average before the onset of COVID-19 (1 March 2020) will receive $650 per fortnight.

  • To receive JobKeeper in the March 2021 quarter, organisations will need to further reassess their eligibility in January 2021.

  • New participants can apply to receive the JobKeeper payment.

  • Click here to access the Fact Sheet on the Extension of JobKeeper Payment.

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Updated 1 April 2020 following amendments issued by Treasury on 31 March 2020

Australia’s wage subsidy scheme, known as the JobKeeper Payment, is the third economic stimulus package announced by the Federal Government in its coronavirus response. Businesses can apply to the Australian Taxation Office (ATO) for financial support to keep their employees on the job. Around 6 million Australians are expected to receive a flat payment of $1,500 per fortnight (before tax) for up to six months through their employer.

The wage subsidies, estimated to cost the Australian Government $130 billion, will be released to employers from early May 2020. Employers must experience a required turnover decline to be eligible to receive wage subsidies.  

Even though a business may close its doors during the next six months, the JobKeeper Payment will pay employees to remain on the books and essentially be ready to resume their jobs when the business re-opens. It is the employer’s responsibility to pass on the wage subsidy in full.

Key points

  • Businesses with an annual turnover of less than $1 billion and their turnover has fallen by more than 30 per cent (of at least a month) are eligible.

  • Businesses with an annual turnover of $1 billion and their turnover has fallen by more than 50 per cent (of at least a month) are eligible.

  • Employees will receive $1500 per fortnight from their employer for up to six months, even if they were earning less than this amount.

  • Employees who accept JobKeeper Payments and were also applying for or receiving an income support payment must advise Services Australia.

  • Eligible employees must have been on the books on 1 March 2020.

  • Employees continue to work or continue to be paid while the business closes down temporarily.

  • The ATO will make payments available to employers from the first week of May 2020.

  • Superannuation responsibilities apply.

  • More details to be released.

How much is the JobKeeper Payment?

Every eligible employee must receive at least $1,500 per fortnight from their employer, before tax. The Australian Government has declared $1500 a full median wage replacement for workers in the accommodation, hospitality and retail sectors. The wage subsidy is 70 per cent of the national median wage.

Employees that were previously earning less than $1500 per fortnight will be topped up to the full wage subsidy.

Employers who remain in business with employees who are receiving JobKeeper Payment should use the payment to subsidise the employee’s regular income according to the prevailing workplace arrangements.

The wage subsidy will be available for up to six months.

Who is eligible for the JobKeeper Payment?

The payment will be made to employers to pass on to their employees. The following business entities are eligible if other criteria apply:

  • Companies

  • Partnerships

  • Trusts

  • Sole traders, self-employed individuals

  • Not for profits, including charities

Businesses with an annual turnover of less than $1 billion and their turnover has fallen by more than 30 per cent (of at least a month) are eligible.

Businesses with an annual turnover of $1 billion and their turnover has fallen by more than 50 per cent (of at least a month) are eligible.

The activity statement reporting system (monthly or quarterly BAS) will be used by the ATO to assess reduced turnover. In general, the ATO will be assessing reduced turnover relative to turnover in the same period (month or quarter) in the previous year.

The Tax Commissioner has the discretion to assess a business individually:

  • if the previous year is not representative of the business’ usual or average turnover;
  • if the business is newly established;
  • if turnover is typically highly variable.

In addition, the Tax Commissioner has the discretion to:

  • use other tools to assess a business’ eligibility;
  • issue JobKeeper Payment to a business that has estimated the required reduction in turnover but actually experiences a slightly smaller downturn.

Businesses subject to the Major Bank Levy are not eligible under the wage subsidy scheme.

Employees who receive the payment can be:

  • Full-time or part-time employees

  • Stood down since 1 March 2020 

  • A casual worker who has been with their employer for at least the previous 12 months  

  • Australian residents

  • New Zealand citizens in Australia who hold a subclass 444 special category visa

  • Migrants who are eligible for JobSeeker Payment or Youth Allowance (Other)

  • At least 16 years of age

An employee cannot receive the JobKeeper payment from more than one employer. A previous employee who is re-engaged through the JobKeeper Payment, must advise Services Australia if they start receiving income in addition to any income support e.g. JobSeeker Payment they are receiving.

When will the JobKeeper Payments start?

The ATO will release the first payments to eligible businesses in the first week of May as monthly arrears. Businesses will continue to be reimbursed by the ATO from the first week of May.

Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.

How do I apply to receive wage subsidies?

Businesses are asked to apply for the payment online. The ATO is taking registrations now.  

The business must:

  • Provide the ATO with the number of eligible employees engaged as at 1 March 2020.

  • Where there are no employees e.g. self-employed, nominate an ABN and an individual to receive the payment.

  • Continue to provide monthly updates to the ATO.

  • Advise employees that they have been nominated to receive the payment.

For most businesses, the ATO will use Single Touch Payroll data to pre-populate the employee details for the business.

Superannuation and the JobKeeper Payment

Where an eligible employer continues to operate with employees receiving the JobKeeper Payment, the employer will continue paying the superannuation guarantee on the employee’s income where the employee receives their full income. If an employee receives more than their usual income via the JobKeeper Payment, the business must continue to pay the superannuation guarantee on the usual income and has the option to pay superannuation on the additional income (before tax).

Where an eligible employer has stood down employees (e.g. in the case of a beautician that was forced to shut down), the employer can choose whether to pay superannuation on the JobKeeper Payment the employees will receive.

The Australian Government is expected to release more wage subsidy details once the legislation has been passed.

Useful resources:

Read the Australian Government’s Fact Sheet: Extension of the JobKeeper Payment

For more information, refer to the  Treasury’s JobKeeper Payment

For more information on how to enrol for JobKeeper, visit the Australian Taxation Office website

For faster cash recovery in the current B2B environment, use ezyCollect free for one month

How to get your business cash flow boost from the Australian Government

How to get your business cash flow boost from the Australian Government

On 24 March 2020, the Australian Government’s Economic Response to the Coronavirus package passed without objection through Parliament. With the green light to go ahead, the economic stimulus package, currently worth $84 billion, promises direct financial support for workers and students and a cash flow boost for businesses and not-for-profits. 

As a result, the Australian Taxation Office (ATO) will deliver the tax-free cash flow boosts to small and medium businesses and not-for-profits from 28 April 2020. Entities do not need to apply. The ATO will calculate a business’ eligibility for the cash flow boost when the business lodges its activity statement. Businesses will receive tax credits, which means that eligible entities will pay less tax to the ATO.

Key points

  • The Australian Taxation Office is administering the business cash flow boost.

  • Your entity must have held an ABN on 12 March 2020 and still be active.

  • A business must lodge its activity statements so that the ATO can assess its eligibility for the cash flow boost.

  • Not-for-profits, sole traders, partnerships, companies or trusts with an aggregated annual turnover under $50 million (based on prior year turnover) are eligible.

  • Your entity must have lodged its 2019 tax return on or before 12 March 2020.

  • The ATO will issue businesses with payments from 28 April 2020, as credits in the activity statement system.

  • Additional payments are available for businesses that are still active July-October 2020.

Lodge activity statements to receive the cash flow boost

The ATO will deliver the cash flow boost of up to $100,000 (minimum $20,000) per eligible businesses through credits in the activity statement system. Therefore, to be eligible, businesses must lodge their activity statements.

Your business will receive its first cash flow boost from 28 April 2020, even if it has lodged the activity statement earlier.

Eligible entities that remain active throughout July-October 2020 will receive an additional payment, equal to previous payments they have received under the Boosting Cash Flow for Employers scheme.

March 2020 activity statements are due to the ATO in April 2020. If your business lodges monthly, the due date is 21 April 2020. Quarterly reporters must submit by 28 April 2020.

Is my business eligible for the cash flow boost?

12 March 2020 is a critical date. Your business must have held an ABN on 12 March 2020 and continue to be active. Only registered charities are exempt from this cut-off date.

The ATO will assess your business’ eligibility based on your most recent income tax assessment for a prior year. (You may still be eligible if you do not have any income tax assessments for prior years.)

Not-for-profits, sole traders, partnerships, companies, and trusts with an aggregated annual turnover under $50 million are eligible if they meet all other criteria.

Your small or medium business must have made the eligible withholding payments it was required to:

  • salary and wages

  • director fees

  • eligible retirement or termination payments

  • compensation payments

  • voluntary withholding from payments to contractors

In addition, your business must also have either:

  • Lodged your 2019 tax return on or before 12 March 2020 to declare your business income in the 2018–19 income year. 

  • Made GST taxable, GST-free or input-taxed sales in a previous tax period (since 1 July 2018) and lodged the relevant activity statement on or before 12 March 2020.

How much money will my business receive?

In the initial cash flow boost, your business will receive 100 per cent tax back on the withholding tax you pay the ATO for employees’ salary and wages (maximum limit of $50,000). 

Even if your business is not required to withhold tax, you will receive a minimum payment of $10,000 if you pay salaries and wages.

If your business remains active and eligible in July, August, September and October 2020, you will be eligible for additional payments, equal to previous payments you have received. 

However, you will not be eligible to receive any more cash flow boosts until your PAYG withholding exceeds $10,000 over the relevant periods.

How do I receive the money?

The ATO will apply the cash flow boost as credits to offset your business’ liabilities owing from the current activity statement. 

For example, a quarterly activity statement lodged in April 2020 will receive credits for quarter 3 ending March 2020. A monthly activity statement lodged in April will receive credits for March 2020. Monthly lodgers will receive a credit that is calculated at three times the rate (300 per cent) in the March 2020 activity statement, to align with quarterly lodgers.

If your business receives more credit than it has tax liabilities, the ATO will refund the excess amount within 14 days. 

Note: The ATO acknowledges that some business systems will be unable to take the cash flow boost into consideration when working out how much tax is payable on the activity statement. Businesses that overpay will receive a refund.

The earliest the ATO will release credits is 28 April 2020.

Additional payments to eligible businesses for the July-October period will be 100 per cent of the initial cash flow boost. The ATO will distribute additional payments in four or two equal instalments depending on whether your business lodges activity statements monthly or quarterly.


For more information, refer to the  ATO Boosting Cash Flow for Employers

Read the Australian Government’s Fact Sheet on the Economic Response to the Coronavirus.

ezyCollect is offering to set up new businesses with 2 months free use of its accounts receivable tools through the COVID-19 period.