ATO debt has become one of the biggest pressures facing Australian businesses, but according to AGP’s Ashleigh Burke & Olga Koskie from Tax Assure, tax debt is rarely the first issue a business encountersIn a recent discussion, the pair explored the growing link between unpaid invoices, cash flow disruption, and mounting ATO liabilities. Their recent conversation highlighted an important reality many business owners overlook: businesses usually do not fall behind on tax because they are irresponsible — they fall behind because something else has already gone wrong.
ATO Debt Is Often the Result of Cash Flow Pressure
Olga explained that many businesses approach Tax Assure once they are already under significant financial stress. Tax Assure specialises in helping businesses negotiate long-term payment arrangements with the ATO, stop recovery action where possible, and seek remission of interest charges.
However, Olga emphasised that tax debt is commonly a secondary issue. One of the biggest contributors is unpaid invoices. When clients fail to pay on time, the flow-on effect can quickly impact wages, supplier payments, and eventually tax obligations. Businesses are forced to prioritise which debts get paid first, and the ATO often gets pushed further down the list.
Ashleigh, who works closely with businesses dealing with overdue accounts, sees this pattern as becoming increasingly common. When money stops flowing into a business consistently, pressure builds quickly. Invoices go out late, follow-up slows down, and owners become overwhelmed trying to juggle competing priorities.
Why Communication Matters
One of the strongest messages from Ashleigh & Olga’s discussion was the importance of communication.
Ashleigh’s experience is that picking up the phone and having a conversation is often far more effective than sending repeated emails or aggressive legal threats. Many people dealing with debt are already under immense pressure, and an empathetic conversation can open the door to workable solutions. After nearly 18 years in debt collection, Ashleigh believes understanding a debtor’s circumstances leads to better outcomes than immediately escalating matters legally. By listening first and working collaboratively, businesses are often able to recover debts while preserving relationships and avoiding unnecessary costs.
Olga notes that proactive communication with the ATO is critical as well. Many business owners do not realise that missing just one payment on an ATO payment plan can default the entire arrangement. In addition, businesses must continue lodging and paying ongoing obligations such as BAS on time to remain protected from recovery action.
Without communication or intervention, directors can quickly face garnishees, Director Penalty Notices, and other enforcement measures.
The Growing Need for Specialists
Another important point raised was the increasing need for specialist support.
In previous decades, accountants were often expected to handle everything from tax advice to debt management and cash flow monitoring. Today, however, businesses are increasingly relying on specialised advisors to navigate complex financial challenges.Tax specialists, debt collection professionals, legal advisors, and restructuring experts each play a different role in helping businesses stabilise and recover.Ashleigh and Olga both emphasised the value of collaboration between specialists. By working together, they help businesses improve cash flow, recover outstanding debts, negotiate with the ATO, and create breathing space for owners to focus on running their operations.
Legal Action Still Has Its Place
While empathy and communication are central to their approach, both acknowledged that there are situations where legal action becomes necessary. Ashleigh explained that when debtors completely stop communicating despite repeated attempts to resolve matters, businesses may have no choice but to commence legal proceedings. In many cases, this ultimately leads to recovery, although it often comes with additional costs and stress for everyone involved.
The goal, however, is always to resolve matters before they escalate to that point.
A Reminder for Business Owners
Financial hardship in business is rarely simple. ATO debt, unpaid invoices, and cash flow pressure are often interconnected, and many struggling business owners are carrying enormous emotional stress behind the scenes. Seeking help early, communicating openly, and engaging the right specialists can make a significant difference before problems become unmanageable. For businesses currently dealing with unpaid invoices, tax debt, or mounting financial pressure, the key message is clear: you do not need to face it alone.
