By Mira Showers, CIPHE Industrial Associate member.
When rushing from job to job, dealing with customers while trying to balance family life, dealing with business finances might be the last thing you want to face. But staying on top of your cash flow is a vital part of running a successful business and can save you from a more painful financial headache down the line.
That’s why we’ve asked Mira Showers’ Finance Director, Tom Foster, for his top tips on how to improve cash flow. Following this advice will go a long way to ensuring you keep things ticking along nicely.
Get paid on time
Late payments can really disrupt your cash flow. Online invoicing tools, clear payment terms (like "Payment due within 7 days") and the occasional polite-but-firm reminder can all help to remind customers that they need to pay you for your work when agreed. If you're working with bigger companies, check if they offer early payment options. It can be a real game-changer.
Ask for deposits upfront
Asking for a deposit before starting a job covers your material costs and means you don't have to wait for the final balance. Many customers expect to pay a deposit, and it can be a sign of your professionalism.
Plan for the quiet times
Sometimes jobs can go a little bit quiet, especially across the summer. Instead of scrambling when work slows down, plan ahead. Set aside some extra cash during the busy times to cover the quieter months. That way, you can use the downtime to chase leads, refresh your marketing or sort out admin.
Keep track of your expenses
Those small costs can add up fast - extra trips to the merchant, tools that break or daily meal deals can all eat into your profits. An expense-tracking app like Xero or QuickBooks can help you monitor spending and cut back where needed.
Price your jobs right
If you're not turning a decent profit, your pricing might be off. Make sure you're covering materials, labour, time, fuel and business overheads. Review your pricing regularly and don't undervalue your work.
Offer payment plans
For bigger jobs, some customers might find it easier to pay in stages. A structured payment plan (like 50% upfront, 25% midway, 25% on completion) can keep cash flowing while making payments more manageable for your clients.
Build a cash reserve
Those unexpected costs like van repairs or emergency supply runs - are part of the job. Having a financial buffer, even a few hundred pounds, can make a big difference and reduce financial stress.
Keep your accounts on top
Admin isn't the most exciting part of the job, but keeping your finances in order saves hassle down the line. Set aside time each week to update invoices, chase payments and review cash flow. That way, you can focus on delivering top-quality work.
Managing cash flow doesn't have to be difficult. By building a few simple habits - like taking deposits, setting clear payment terms and tracking expenses - you can keep things running smoothly.