Cash Flow Calculator

Cash flow problems are the number one reason trade businesses fail. You often pay for materials upfront but do not receive full payment for weeks. A profitable business can still go bust if cash runs out before payments arrive.

Taking a deposit (typically 10-25% of the job value) before starting work helps cover initial material costs. For larger jobs, agree staged payments at key milestones - this keeps cash flowing throughout the project.

Aim to have at least 3 months of expenses in the bank. This covers quiet periods, late-paying customers, and unexpected costs. 6 months provides a comfortable buffer. Below 1 month is a danger zone.

Invoice immediately on job completion, take deposits on larger jobs, negotiate 30-day terms with suppliers (instead of paying upfront), use staged payments on projects, chase late payments promptly, and keep a cash reserve for VAT/tax bills.

Yes. A common rule of thumb is to move 25-30% of your profit into a separate account each month - rising to around 40% if your profits push you into the higher-rate band. This is a budgeting guide, not an HMRC rule: your actual liability is Income Tax (20%, 40% or 45%) plus Class 4 National Insurance (6% on profits between £12,570 and £50,270, then 2% above), worked out on your Self Assessment return. If your previous tax bill was over £1,000 you will also make Payments on Account - two instalments of 50% each, due 31 January and 31 July - so provision for those too. Setting money aside throughout the year avoids the shock of a large bill in January.