"I built it, and I still had to train. It is hard work, but it is the only way to understand these statements."— Stephen Fairbairn · Founder, BusinessSolvency
Module Summary
Training — the essence of it, in two minutes.
BusinessSolvency answers one question: will all the cash coming in cover all the cash going out, this year and in the years ahead? Getting a true answer means entering the right figures, in the right year, and reading the three statements together. That is a skill, and it is learned by practice.
Why it matters
Small slips change the whole picture: a tick in the wrong year, or a page read before it was saved. Training teaches the habits that stop this.
Who it is for
How it works
After approval, you practise on your own training copy of a demonstration business. Every page is clearly marked as training, and any mistake can simply be undone.
What it covers
Reading the three statements together, saving and checking, working year by year, the ATO and the cash, and the Sustainable Cashflow Formula.
Building reserves — the buffer
Cash saved in good times carries your business through a downturn and pays the tax when it is due. In hard times the bank and suppliers give less credit, and reserves can’t be borrowed when they are needed. They have to be built.
Training never really stops
Inflation, interest rates, drawings, margins and tax rates move every quarter. Training is a habit of reviewing what has changed, not a one-off course.
Getting started
Request access. Once approved, log in, open How It Works and begin practising.
- 1Training comes first.
- 2Why it matters — a morning’s story.
- 3Who training is for.
- 4How training works.
- 5What training covers.
- 6Building reserves — the buffer that keeps you trading.
- 7The cash conversion cycle — the days your business funds its own trading.
- 8Training never really stops.
- 9Getting started.
Training Comes First
Training comes first.
Most business software asks you to type in figures and press a button. BusinessSolvency is different. It links three statements, the Income Statement, the Balance Sheet and the Cash Flow, across your business’s past years and the years ahead. Change one figure and others follow, sometimes in a later year.
That linking is what makes BusinessSolvency useful: it shows early whether your business can keep paying its way. It is also why nobody should rely on it before they have been trained. The figures are only as good as the person entering and reading them.
The rule
Learn first, on practice figures. Then use BusinessSolvency for a real business, with its accountant involved.
Why It Matters
Why it matters — a morning’s story.
One morning while BusinessSolvency was being tested, its founder practised on a training copy of a demonstration business, a small coffee van. He wanted to see what happens when the tax bill is not paid on time and the ATO adds interest.
Two things went wrong, and both are easy to do.
First, he read the page before saving it. Some figures update as you type. Others are only worked out when you save. His printout mixed old and new figures, so the cash and the owner’s equity looked wrong. Once he saved, everything agreed. BusinessSolvency now shows a bright yellow “Not saved yet” bar the moment anything changes, but the habit still has to be learned.
Second, he ticked the right box in the wrong year. The test was one year’s tax unpaid. With the tick in two years, it became two years’ tax unpaid, and the debt to the ATO tripled. That is a fair “what if”, but it was not the question he meant to ask.
Neither slip did any harm, because it was a training copy. On a real client’s figures, either one could lead to the wrong advice. That is what training is for.
Remember
If something slips through and gets saved by mistake, that’s fine. It’s a training copy, so you can untick it and save again.
The three habits, step by step: User Manual 3B.3 →
Who It Is For
Who training is for.
Everyone who enters or reads the figures. Each brings different strengths, and each has something new to learn.
Accountants
You know historical accounts well. BusinessSolvency adds the forecast years: will the plan the owner has chosen keep the business paying its way? Training shows how to set up a client, read the forecast and explain it in plain words.
Bookkeepers
Often the person keeping the figures up to date, under the accountant’s supervision. Training covers entering each quarter’s figures accurately, saving and checking, and spotting when something does not look right.
Business owners
You make the decisions: what you draw, what you charge, what you spend. Training, alongside your accountant, shows how each of those decisions changes whether your business can keep paying its way, this year and next.
How It Works
How training works.
Training is hands-on and happens inside BusinessSolvency, after your access has been approved.
Practise on a demonstration business. BusinessSolvency includes demonstration businesses with complete figures and a full story. Accountants can make their own training copy of any of them: a full replica they can change freely.
Every page says it is training. A training copy carries a clear “Training copy — not real figures” banner on every page and every printout, so practice can never be mistaken for a real business. The demonstration business itself is never changed.
Mistakes cost nothing. Change the drawings, skip a tax payment, try a different plan, then see what happens in every statement and report. Anything can be undone and saved again.
Owners learn with their accountant. Training copies are made by accountants, who can then take the owner through the business’s figures together.
The step-by-step guide is in the User Manual, Chapter 3B: Training — Practise First, Then a Real Client →, and inside BusinessSolvency in How It Works, where approved users can follow it as they go.
What It Covers
What training covers.
Training works through the skills a reliable answer depends on (exercises for each in User Manual 3B.4):
Reading the three statements together
How a change in the Income Statement flows into the Cash Flow and the Balance Sheet, and why all three must agree.
Saving and checking
Which figures update as you type and which only on saving, and the checks to make before reading or printing a report.
Working year by year
Past years and forecast years, choosing the right year before typing, and how one year’s figures carry into the next.
The ATO and the cash
Tax set aside, tax paid on time or not, payment plans and the ATO’s interest charge, and what each does to the cash.
The Sustainable Cashflow Formula
Reading the Breakeven test and the reports, and explaining them to an owner in plain words.
Working capital
What it is, the job it does, and why solvency trouble shows there first, often while the profit still looks fine.
The cash conversion cycle
The days your business funds its own trading: stock days + customer days − supplier days, and how to shorten them.
Building reserves
How much buffer to aim for, where it comes from, and how it keeps the tax paid on time and your business trading.
Reading the warnings
Pink means act now: what each warning asks of you, and printing the pages and reports for the meeting with your accountant.
Building Reserves
Building reserves — the buffer that keeps you trading.
Training is not only about entering figures correctly. Its real purpose is to keep your business solvent, with cash coming in that covers the cash going out, so it can keep trading. The most important step towards that is building a cash reserve.
A reserve is cash put aside for the unforeseen: a slow quarter, a customer who pays late, a breakdown, or a tax bill that falls due at the wrong time. When the unforeseen arrives, the reserve carries your business through to better days.
Why it can’t be borrowed. Businesses have long relied on the bank overdraft and on suppliers’ credit to cover these gaps. That headroom was always short. In hard times like these it gets shorter still: banks and suppliers cut back, and nobody has spare credit to give. A reserve has to be saved and built, in the good times, before it is needed.
Why it limits ATO problems. With money set aside, the tax is paid when it is due: no payment plan, no ATO interest charge, and no debt weighing on the years ahead.
Training shows how BusinessSolvency builds reserves into the plan: how much buffer to aim for, in months of cover, and how much can come from trading and how much from the owners.
The essence
Build the buffer in good times, because you can’t borrow it in bad ones. A reserve keeps the tax paid on time, carries your business through a downturn, and keeps your business trading.
Read Building Reserves — the buffer that keeps a business trading →
See reserves at work in the User Manual: Bayside builds its reserve before the next shock (8B.11), Coastal’s reserve-backed recovery (10.10), and Noosa Care, where no reserve can be built (8C.7). Practise it on a training copy: 3B.5 →
The Cash Conversion Cycle
The cash conversion cycle — the days your business funds its own trading.
Every dollar your business spends goes on a round trip. It buys stock; the stock waits on the shelf; it is sold, often on credit; and the dollar comes home when the customer pays. Suppliers help by letting you pay them later. The days in between, from paying your suppliers (cash out) to your customers paying you (cash in), are days your business funds its own trading, out of its own working capital (what working capital is, and why solvency trouble shows there first: Manual 3.10).
A simple example
Stock waits on the shelf for 20 days, and customers take 30 days to pay: a round trip of 50 days. Suppliers wait 30 days to be paid. So your business carries 20 days of its own trading:
stock days + customer days − supplier days = the cash conversion cycle (20 + 30 − 30 = 20 days).
Why it belongs in training. It is one of the most important steps to building sustainable cashflow, and one of the least understood. Most accounting software shows the balances (stock, what customers owe, what you owe suppliers) but not the days. Many businesses have no working capital system at all: no written payment terms, and no set days to follow up an overdue account, often because the owner fears losing the customer. A simple system changes that, and gives the owner more credibility, not less.
What training covers. Reading the days for your own business; setting Debtor Days, Creditor Days and Stock Days on the Forecast page; why the box turns pink when your business funds more than 60 days, and whether the cash is waiting in stock or with customers; having enough working capital to carry the cycle even when income is only at Breakeven; and arranging that finance before a new business starts trading.
The essence
Know how many days your business funds its own trading. Every day you take off the cycle is cash back in your bank, without selling a dollar more.
Read it in the User Manual: 11.9 The Cash Conversion Cycle →. See how slow-paying customers and slow stock turned Bayside’s profit into an overdraft: 11.3 and 8B. Inside BusinessSolvency: How It Works: the cash conversion cycle (log in first). Why it matters to every owner: The Problem and The Research.
Ongoing
Training never really stops.
A business does not stand still, and neither do the figures around it. Every quarter and every year something moves: inflation, interest rates, the owner’s drawings, debt levels, buying and selling margins, and the tax rates and payments set by the authorities.
Each of these can turn a sustainable plan into one that is not, or the other way round. The owner’s and the accountant’s decisions shape the result. So training is not a one-off course. It is the habit of reviewing the figures each quarter, asking what has changed, and testing the next decision on practice figures first.
The manual shows the habit at work: the review and update discipline (7.3), making it a habit: your quarterly review (Chapter 3A), and a reporting rhythm built for prevention (12.3).
Getting Started
Getting started.
BusinessSolvency is in alpha testing. Access is approved person by person, and training starts as soon as you are approved.
Request access and start training
Tell us whether you are an accountant, a bookkeeper or a business owner. Once approved, you can log in, open How It Works and begin practising. When you are ready, the accountant sets up the real client: Chapter 3B.6 →
Questions about training?
Email stephenfairbairn@outlook.com