Hi guys, Tony from Plumbers Coach here.
If you find it busy in December but you are worried about January and February and the cash flow problems that can happen, then stay tuned.
Look I know that everyone’s flat out busy during December and are probably not thinking a lot about January and February but if you think back to last year maybe the year before or the year before that, you’ll remember that often in January and February the cash flow can get a bit tight. You’ve got the holiday pay, you got GST due, you’ve got PAYE, and you’ve got Prov tax that can really suck the life out of your cash flow not to mention some of your builders and your clients who go on holiday, forget about paying your bill. Perhaps instead of paying on the 20th of January they pay on the 20th of February and you’ve got to chase them up. And everyone is a bit slow because you got a couple of weeks off work so you’re not actually getting as much money coming to the business. Now here’s something that you really must do to make sure that you don’t get a nasty surprise at Christmas time.
Have you got a cash flow forecast? Now have you actually sat down and worked out over the next 8 to 12 weeks how is your cash flow going to look on a week by week basis? Now what you need to do is just estimate how much money is actually going to come into your bank account and then estimate how much is going to go out. Make sure you take account of everything. You know the GST the Prov Tax, your PAYE and your holiday pay all of that stuff and in time out when you expect to get payments from your good clients. It’s absolutely critical. What I would do is I will highlight to you when you are going to have cash and if you’re going to be short and when you’re going to be short. Now it’s much better to be forewarned then you can be forearmed. You can make some decisions about how are you going to actually deal with it rather than getting a nasty surprise generally on the 27th when you now basically have got no money left to pay wages or you pay your creditors which is not a good outcome and that you want over the Christmas period.
Now I got something that’s really going to help you. This is something we share with our million – dollar plumber clients. So it’s really valuable information. It’s a weekly cash flow forecast and you can grab a copy of that just by clicking on the download link. Download it, plug your figures in, and then see how your cash flow is going to look.
Now I hope you find it helpful guys.
If you got any comments to make or any questions, just post them in the chat box below. Otherwise, have a great Christmas and we look forward to talking to you again soon.