Cash flow gap planner

How the cash flow gap planner works

Every trade business runs on a simple loop: you spend money to do the job, you invoice, and then you wait. This planner replays that loop week by week for twelve weeks. Each week, it adds the invoices that fall due, subtracts wages, materials and fixed costs, and takes off your one-off bill in the week you pick. The line that results is the balance in your account at the end of each week.

Invoice terms do the damage. With payment on the day, a busy week of work feeds straight back into the bank. With 30 or 60 days, you're funding every job out of your own pocket for weeks before the money comes back, and growth makes it worse, because a bigger workload means more cost sitting in unpaid work.

How to read your result

Look at four numbers. The lowest balance and the week it happens tell you when to act. The first week below zero shows how long you have before the account bounces something. The peak shortfall is the size of the hole at its deepest, which is the number that matters when you talk to a lender, because a facility only has to cover the gap, not the whole job. The normal week figure shows whether the business makes or loses money once invoices are flowing; if that's negative, no finance fixes it and pricing or costs need a look.

What to do about a gap

• Pull the money in. Shorter terms, deposits and staged payments change the picture more than any loan. Our guide to progress payment gaps shows how to line payments up with your costs.
• Deal with the slow payers. If one client is half your problem, read about slow-paying builders before you add more work for them.
• Smooth the one-offs. A big bill landing in a thin week is the classic trigger. Park money for it using the GST and BAS Set-Aside Planner.
• Bridge what's left. Options such as invoice finance or a line of credit can cover a timing gap, and property-secured finance can be an option for larger amounts. Which suits you depends on your trade, your clients and what you can offer as security.

Making the numbers honest

The planner is only as good as what you type. Use your last three months of bank statements to find the real weekly wages, materials and fixed costs, and your accounting software to find how long invoices actually take to be paid. Include the unglamorous items that miss out of quotes: fuel, tolls, tip fees, the accountant, workers compensation and the phone bill. If your income swings a lot between weeks, run the planner twice, once with a typical week and once with a lean one, and plan around the lean version.

When you've got a gap you can't close by chasing or re-timing, the next step is a conversation about funding sized to that shortfall. A 60-second enquiry costs nothing, and there's no credit check when you first enquire. Tell the form the amount from the peak-shortfall line, and answer accurately so we can point you the right way first time.