Irregular income is a common cash flow issue for Australian SMEs, but it’s rarely discussed. This week’s Let’s Talk asks experts how to forecast better when revenue doesn’t come in consistently.
Cash flow forecasting is hard enough when revenue is predictable. When it is not, when income arrives in bursts, drops without warning, or follows seasonal patterns that never quite repeat the same way twice, the usual spreadsheet approaches tend to fall apart fast. For many small business owners, lumpy revenue is not the exception. It is just how the business works. Project-based income, seasonal trade, client payment cycles, and invoice delays all create gaps that are difficult to plan around and even harder to explain to a bank or an investor.
This week’s edition of Let’s Talk puts that exact problem to our experts. Here is what they had to say.
Let’s Talk!
Patrick Coghlan, CEO, CreditorWatch
“When revenue is lumpy, accurate cash-flow forecasting starts with better credit risk management. Too many businesses focus on sales projections and miss what’s happening in their receivables ledger. From our data at CreditorWatch, we consistently see that changes in payment behaviour are one of the earliest signs of cash-flow stress – well before it shows up in the financials.
Businesses that forecast more accurately treat cash flow as a live risk signal. They actively monitor customers, update forecasts frequently, and build scenarios for late or missed payments rather than assuming everyone pays on time. CreditorWatch helps businesses do this by providing always-on monitoring and early-warning alerts, using real-time payment behaviour and local risk signals like ATO defaults to show when customer risk is changing. That visibility allows leaders to act early – tightening credit terms, prioritising collections, or adjusting exposure before cash is hit. In volatile conditions, strong cash flow isn’t about prediction; it’s about control, and credit risk is where that control starts.”
Sally Davies, General Manager Solo and Embedded Finance, MYOB
“Most SMEs don’t have a revenue problem. They have a timing problem. And right now, that pressure is being amplified by rising operating costs many businesses didn’t anticipate. New MYOB analysis shows a 35% year-on-year increase in fuel operating expenses in March 2026 alone.
Despite this, many SMEs expect little movement in key costs: 54% say prices and margins will stay the same, 64% expect employee costs to hold steady, and 73% anticipate no change in casual staffing. The reality is most costs are fixed, while revenue isn’t — and that’s where pressure builds.
To stay ahead, businesses need to forecast for varying income, not average income, and increasingly for fluctuating costs too. Very few SMEs experience a perfectly smooth month, yet many decisions are still made on smooth assumptions. That gap is where cash flow stress takes hold.
Three shifts can make the biggest difference: drop the single forecast and plan for a range of outcomes; know your non-negotiables such as wages, Super, rent and suppliers; and manage timing, not just totals. A small improvement in how quickly invoices are issued, followed up and paid can have a bigger impact than chasing new revenue. Better forecasting isn’t about predicting perfectly — it’s about having enough visibility to act early instead of reacting late.”
Nadine Connell, Co-Founder, Director & Commercial Finance Expert, Smart Business Plans
“Most cash flow forecasts for small businesses are wrong before they’re finished. Not because the numbers are bad, but because they’re built on invoices instead of what actually hits the bank.
If a customer consistently pays in 45 or 60 days instead of your 30-day terms, your forecast is wrong every single time. Not about the amount, but about when. Build your forecast from actual bank receipts, not invoice dates. That single change fixes more cash flow surprises than any spreadsheet formula.
But here is the bigger shift.
After 15 years arranging finance for small businesses, the owners who handle lumpy revenue best are rarely the ones with more accurate forecasts. They are the ones who have stopped trying to smooth something that is not smooth.
The better question to ask is: what does my business need to survive a bad month, and do I have access to it?
Know your actual floor, the bare minimum monthly outgoing the business cannot escape. A rolling view of your worst three recent months tells you more about your true cash needs than any forward projection. Build your buffer around that, not around an optimistic forecast of when the next payment arrives.”
Maria Kathopoulis, CEO & Chief Marketing Officer at UNTMD
“Lumpy revenue becomes manageable when forecasting is based on probability rather than averages.
Instead of treating revenue as one number, separate it into three categories: contracted, probable and pipeline.
Contracted revenue includes signed agreements with defined payment terms. Probable revenue sits in late-stage deals with a strong likelihood of closing. Pipeline revenue should be discounted significantly to reflect uncertainty.
The second critical factor is payment timing. Many forecasts fail because they track deals rather than when cash actually arrives.
Scenario modelling also improves planning. A base, conservative and optimistic forecast provides a realistic operating range.
Cash flow forecasting becomes far more reliable when it is tied closely to the sales pipeline and updated regularly.
When leaders understand their probability pipeline, they can anticipate gaps months in advance and make smarter strategic decisions.”
Mareike Niedermeier, Founder and CEO, Sales Savvy Online
“The problem isn’t lumpy revenue. It’s a lack of visibility into your numbers.
Most e-commerce businesses try to forecast based on memory or gut feeling, and then wonder why they’re consistently surprised. The fix is simpler than most people think. Go back 12-24 months of actual data and find your averages, peaks, and patterns. Revenue may be lumpy, but lumpy has a rhythm.
From there, forecast in 30 day micro cycles rather than using annual projections. A 12 month forecast built on guesswork is decorative. A 30 day forecast built on real data is a decision making tool.
For systems, start with what you already have. Your accounting software, combined with your Shopify or ecommerce platform data, gives you everything you need to map revenue trends, identify slow months, and plan cash reserves accordingly. You don’t need a CFO. You need the discipline to look at your numbers weekly, not quarterly.
Visibility is the forecast. The rest is just maths.”
Francesco Colavita, Senior Vice President, Sales APAC & MEA, JAGGAER
“Lumpy revenue is a reality for many businesses — seasonal spikes, project-based billing, and long sales cycles all create forecasting headaches. The real question for the C-suite is not how to eliminate variability in cash inflows, but how to gain greater control over cash outflows.
The organisations that forecast most accurately don’t have smoother revenue, they have sharper spending visibility. When procurement and account payables operate in silos, liabilities remain hidden until invoices arrive, limiting finance’s ability to anticipate exposure and manage working capital strategically.
A connected procure-to-pay process changes that dynamic. With real-time insight into approved purchase orders, contract commitments, invoice status, and payment timing, CFOs can forecast cash requirements earlier and with greater confidence. That visibility supports stronger liquidity management, better timing decisions, and a more resilient business.”
Alistair Jarvis, Managing Director, Profitability Partners
“Effective cash flow management is a direct result of profitability, not just sales volume. While customers may pay immediately, a high bank balance is often a deceptive indicator of health because much of that capital is already spoken for by the ATO, landlords, and suppliers. To forecast accurately when revenue is volatile, you must shift your focus from tracking historical data to managing future profit drivers.
The most reliable way to stabilise cash flow is to manage the variables you can control: wages and Cost of Goods Sold (COGS). In hospitality, we use forward-looking data – such as upcoming functions, event bookings, and seasonal trends – to align labour and inventory spend with expected demand. We’ve seen venues significantly improve their resilience by moving away from gut feel to adopting a rigorous weekly reporting cycle. When a business allows for immediate adjustments, if sales dip, you can pivot your planning to protect your margin before the cash is spent.
Ultimately, cash flow issues are usually profit issues in disguise. By maintaining a disciplined cycle of planning and execution focused on weekly performance, you ensure that lumpy revenue doesn’t dictate your business’s survival. Clear, data-driven forecasting ensures you are managing your money, rather than letting it manage you.”
Cate Kemp, Financial Performance Engineer, The Control Room
“Not even the best plan survives first contact with reality. Cash flow forecasting is no different, especially when revenue is lumpy.
The answer? Build a model that handles reality.
The ‘boring basics’ are critical. If your financials aren’t accurate, complete, and current, and reflect the business (not just your tax position), then any forecast built on them is fragile and flawed.
That means… you need to get intimate with your balance sheet. (Yeah, that bad boy matters. It’s not some spreadsheet you avoid like it’s asking you for money.) Understand it. Confirm your real cash and credit position. Know your receivables, your payables, your non-operating cash flow, your employer liabilities. These are all the things that quietly stack up, then punch you in the face.
Only once these drivers are clear, does forecasting become meaningful.
AND HERE’S THE FUN PART… even after you’ve done all the work, you’re still not finished because your forecast is a living, breathing tool. If you are not feeding it at least weekly, it dies. (Rude!) You’re feeding it reality – what’s changing, what’s not.
Putting your forecast on a reality diet is the key to addressing lumpy revenue and getting meaningful, actionable results.”
Morgan Wilson, Founder & Director, creditte chartered accountants & advisors
“Lumpy revenue is the norm for most small businesses, not the exception. Project work, seasonal trades, consulting retainers that come and go. The problem is not the lumpiness. The problem is treating cash flow forecasting like a spreadsheet exercise instead of a planning habit.
The most useful thing I tell clients is this: stop forecasting from revenue and start forecasting from commitments. Map every fixed obligation you have over the next 90 days first. Payroll, rent, loan repayments, tax. That is your floor. Then layer in the revenue you have reasonable confidence in. Not the pipeline. Not the maybe. The confirmed work.
Most bookkeeping platforms (Xero, MYOB, QuickBooks) will show you your bills and scheduled payments well in advance. That is your commitment picture, already built. Use it.
From there, you can see your gap clearly. If there is a shortfall in week six, you have time to act. You can chase a slow invoice, delay a discretionary spend, or have a frank conversation with your bank before it becomes a crisis.
Forecasting works when it is short, honest, and done every week. Not once a quarter.”
Muthukumar T, Partner, Befree
“Unpredictable revenue is one of the most common and most stressful challenges facing Australian SMEs. But lumpy income doesn’t have to mean murky finances. With the right discipline, accurate forecasting is entirely achievable.
The first shift is mindset: stop forecasting revenue and start forecasting cash. When income is irregular, the timing of receipts matters far more than the size of the invoice. Know your average debtor days by client type, and build your forecast around when cash actually lands and not when it’s earned.
Second, move to a rolling 13-week cash flow model. Longer horizons lose accuracy fast when revenue is unpredictable. A shorter, weekly-updated forecast keeps you ahead of gaps before they become crises.
Third, always run three scenarios: conservative, base, and optimistic. Single-number forecasts create false confidence. Scenario planning forces you to ask the harder question: what’s our minimum viable cash position, and can we sustain it?
Finally, your books must be real-time. Delayed or inaccurate financial data makes every forecast a guess. Partnering with the right accounting team ensures your numbers are current and your forecasting becomes a genuine decision-making tool and not a retrospective exercise.”
Beau Arfi, CEO, Maple Investment Group
“When revenue is lumpy, the mistake is trying to smooth it out. In property, cash flow is driven by a small number of key events, approvals, construction milestones and settlements. Treat those as the core of your forecast, not the averages around them.
Start by mapping your pipeline clearly. Break projects down into stages and assign realistic timeframes and probabilities to each. Not everything in the pipeline will land, and assuming it will is where most forecasts go wrong.
Next, focus on what actually moves cash. Delays in approvals or settlements have a far greater impact than day-to-day cost fluctuations, so track those closely and update your forecast as conditions change.
Finally, build in buffers. Lumpy revenue requires conservative assumptions, not optimistic ones. Accuracy comes less from precision, and more from understanding what is likely to happen and when.”
Michael Russell, Managing Director at Finwave Finance
“Cash flow forecasting when revenue is lumpy comes down to one habit. Stop forecasting from your P&L and start forecasting from your pipeline.
Most business owners look backward at what they earned last month, then project forward. But lumpy revenue businesses need a forward-looking model built on what is confirmed, what is likely, and what is possible. Keep those three buckets separate and update them weekly.
From there, a few practical steps make a real difference. Map your fixed obligations to the calendar first, not your revenue. Know exactly what date your rent, wages, loan repayments, and BAS are due. Then layer your expected income on top. The gap between those two lines tells you when you need a buffer and by how much.
If that gap appears regularly, it is often better addressed with a line of credit held in reserve than with reactive borrowing after the problem hits. Pre-approved facilities cost nothing to hold and give you breathing room to make better decisions rather than rushed ones.
Lumpy revenue is manageable. Lumpy planning is not.”
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