Cash Flow
Cash flow is the timing of money moving in and out of your business. It shows what is in the bank on a given day. A profitable month can still have poor cash flow if payments are late.
What it means
You can be fully booked, invoicing plenty and profitable on paper. You can still lack the cash to buy materials for next week's job. The money for the last three jobs is still in unpaid invoices. That gap between earned and in the account is the whole cash flow problem.
Deposits, shorter payment terms and progress invoicing on bigger jobs all narrow that gap. They bring money to you closer to when the work happens. Without them, you pay for weeks of labour and materials yourself while you wait on one invoice at the end.
You quoted and started three jobs worth $9,000 combined this month. On paper, that is a great month. But two of those clients are on Net 30 and have not paid yet. The cash in your account this week is $1,200. That is a cash flow gap. It is not a lack of profit.
Judging the business by invoices sent instead of money received. A struggling month can look fine until a bill comes due.
See also
Where this shows up
Want this in one place?
BizBinder keeps quotes, jobs, invoices, and follow-ups in one binder.
You are on the list.
A person reads every request. You will hear from us within one business day.
- 01 A person reads your note — not a queue.
- 02 You get an invite as spots open.
- 03 Your admin starts filing itself.
The free library is open while you wait. Nothing in it needs an account.
- guide How to keep track of jobs without a spreadsheet The six-stage system here is the frame for the tools and sheets in this stage.
- tool Small business admin health check Answer ten quick questions on quoting, invoicing, getting paid, staying organized, and follow-up. You get a score and a plan for your two weakest stages.
- tool Day plan check Enter your start time, your target finish, and up to six jobs with their travel and on-site time. The tool shows if the day fits. It also shows the first job that misses its fixed start time.