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  • Mohammed Rafiq

Handling Irregular Income

Many businessmen, self-employed traders, contractors, and professionals often start small and experience variable levels of income. Unlike regular employees with day jobs, businessmen don’t enjoy the safety that a fixed salary brings. With an unpredictable cash flow to fuel business, irregular income earners often struggle with managing finances for meeting obligations and for developing their business.

The experienced financial planners at ATP Tax Consultants say that the key to managing irregular income is to exercise financial discipline. And knowing your budget is a good starting point. At ATP Tax Consultants, we advise our clients to examine their cash flow and to determine the financial highs and lows as well as the essential expenses for each year.

Advice No. 1

Money saved in good months can cover business costs in lean months. Costs such as annual car registration and auto insurance renewal are due on certain dates. So it’s wise to set aside money throughout the year to pay for these necessary expenses when they fall due.

Advice No. 2

Build an ICE (“In Case of Emergency”) fund. Mishaps and emergencies can strike when you least expect it. The best way to manage unpredictable costs is to set up a separate fund and to grow it by putting away money that you should only access in case of an emergency. For example, you can set up a high interest savings account or place funds in a term deposit that is not linked to a debit card. This approach requires discipline to deposit a fixed amount monthly into this emergency fund and to refrain from drawing any amount except for its earmarked purpose/s.

Advice No. 3

Keep personal and business finances separate. Self-employed and small business owners often use one bank account for keeping cash from all types of sources. This setup makes it difficult for businessmen to stick to their business budgets. Keeping business funds separate also makes record keeping and tax preparation easier. For personal needs, ATP Tax Consultants recommend that business owners pay themselves a regular salary by depositing a fixed amount into their personal bank accounts.

Dealing with an inconsistent income need not be stressful for solo entrepreneurs. The experienced Western Sydney financial consultants at ATP Tax Consultants have been helping business owners, professionals, and self-employed manage their finances by providing important financial advice and strategy and by preparing and analyzing financial statements for them.

We invite you to call us at our Greenacre, NSW, office today on 1300-829-484, or email

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