Hi guys, Tony from Profitable Tradie here. Hey look, do you find you are flat out busy now in December heading up towards Christmas but you are actually worried that your cash flow and how it is going to pan out over the January and February period. Stay tuned, I have got something that is going to be super helpful with that.
Look guys I know that everyone is flat out during December trying to cram in all the jobs you can before Christmas, clients screaming at you to get things done.
So often you are not thinking about how things are going to pan out in January and February in terms of your cash flow. But if you think back to last year or maybe the year before you will remember that January and February can actually get a bit tight with the cash flow.
Now you have got a whole lot of stuff due in January, holiday pay, GST, maybe provisional tax that you need to pay and that can really suck the life out of the cash flow of your business.
Not to mention some of your clients who may be on holiday, they forget about paying their bill, or perhaps they are a bit short for cash and instead of paying on the 20th of January or in January, they roll you over to the 20th of February or even a bit later and you are stuck chasing them up and everyone is just a bit slow because they are working off their Christmas dinner and the cash flow is not necessarily coming through their business as much so that they can pay you as well.
Now here is something that you need to do, you really must do to make sure you are covered over that Christmas period and you don’t get any nasty surprises.
Now, have you got a cash flow forecast? Now a cash flow forecast is really just a prediction of your bank account over the next 8-12 weeks and it is going to show you how your cash flow looks on a week by week basis.
Now all you have to do it is estimate how much money you have actually got coming into your bank account and then estimate how much money is actually going out of the bank account each individual week.
And you have got to make sure your account for everything, GST, taxes, holiday pay and PAYE or other stuff you have got to send off to the tax man. And then you figure out what you can expect to get in from your clients as well and just put that in the weeks you expect to get paid
It is actually critical you do this and what I find is when you do this, you are going to see when you have got plenty of cash and you’re also going to see when potentially you can be a bit short.
Now the good part here is if you are forewarned, then you are forearmed; that means you can actually do something about it, you can make some decisions about how you are going to deal with it rather than getting a nasty surprise on the 19th or 20th of January or February and you are just caught short and you haven’t got a lot of ammunition, to fire to make it come good. That’s certainly not what you want over the Christmas period.
So, I have got something really special for you guys today. Look, you can download a Cash Flow Forecast, it’s what we use with our Million Dollar Tradie clients. You can plug in your information and put a cash flow forecast together real quick, to help ensure you are covered over the Christmas period.
So just plug in your figures, download the tool now and I think you will find it super helpful.