Busy with electrical jobs, but short of cash? Plan the next four weeks

Put dates against the money you expect

You finish a job on Thursday, send the invoice on Friday and have a wholesaler bill to pay on Monday. The diary says you have been busy. The bank balance still has to cover Monday’s bill before that customer pays.

A short cash plan puts those dates in front of you. Start with four weeks so you can see the next supplier payments, expected customer receipts and other commitments together. If the jobs you take on tie up money for longer, extend the plan beyond four weeks. The British Business Bank recommends planning at least as far ahead as your cash flow cycle.

This is a way to organise information for decisions. It does not calculate your profit, decide how much tax you owe or tell you which borrowing arrangement to take. Those questions need your actual accounts and appropriate advice.

Sources: British Business Bank: preparing a cash flow forecast

Start with the balance you can reconcile

Choose a start date and record the actual opening balance in the business account. Check payments still clearing and any commitments that have not left the bank yet. Keep the opening amount and the time you checked it together so somebody else can follow the figures.

If you use more than one account, decide which accounts the plan covers. A transfer between two included accounts does not create new income for the business. If money has been set aside for a known bill, show that commitment rather than treating the whole balance as spare cash.

Keep an agreed minimum cash buffer visible as a separate planning decision. Your business might need enough available money for wages, fuel and a materials purchase before the next customer receipt. Choose the amount from your circumstances; a generic percentage on a worksheet cannot do that for you.

Keep quotes, invoices and bank receipts separate

A quote waiting for approval is not a customer payment. An approved job is not an invoice, and an invoice sent is not money received. Use those stages when deciding what belongs in each week.

For each expected receipt, record the job reference, amount expected to reach the bank, due date and the evidence for your expected bank date. “Customer confirmed Tuesday” is more useful than “should be soon”. Flag overdue or disputed amounts so they do not silently become certain receipts.

Keep possible new jobs on a separate opportunities list. You can explore a scenario that includes them, but label it clearly. The working plan should let you see what happens with the commitments and receipts you already know about.

• Job reference and customer or payer.
• Expected amount reaching the account.
• Due date and expected bank date.
• Confirmed, estimated or at risk, with the reason.
• Who follows up and when the next check is due.

Bring supplier commitments into the same view

List the payments expected to leave the account each week. Include materials already ordered, outstanding supplier bills, wages where applicable, vehicle costs and other agreed commitments. Give each payment its due date and a reference you can check.

Use the amount actually expected to leave the account. Confirm tax payments and treatment with your accountant using the relevant records. Do not substitute a guessed tax percentage, or mix an invoice’s net value with a bank payment that includes tax.

Keep new spending proposals separate until you decide whether to commit to them. A supplier order can create an obligation before the invoice arrives. That is why a list based only on invoices received can miss a payment you will shortly need to make.

Work through one four-week example

The following figures are illustrative, not a customer result, suggested earnings target or complete business budget. Assume an opening balance of £1,200 and that every receipt and outgoing shown is the actual bank amount. All known commitments for this example are included; your own plan needs your own costs.

For each week, add expected receipts to the opening balance, then subtract expected outgoings. Carry the closing balance into the next week.

• Check each closing balance before copying it to the next opening balance.
• Reconcile the final figure to opening cash plus total receipts less total outgoings.
• Investigate the lowest point as well as the final balance.
• Keep the original assumptions with the example or saved worksheet.

Illustrative cash plan: Week 1: £1,200 opening + £2,000 receipts − £2,500 outgoings = £700 closing. Week 2: £700 opening + £1,000 receipts − £1,300 outgoings = £400 closing. Week 3: £400 opening + £3,000 receipts − £1,800 outgoings = £1,600 closing. Week 4: £1,600 opening + £1,200 receipts − £1,400 outgoings = £1,400 closing. Total receipts £7,200; total outgoings £7,000. Opening £1,200 + £200 net movement = £1,400 final balance.

Move one receipt and see what breaks

Now assume the £1,000 receipt expected in week 2 arrives in week 3 instead. Leave all other figures unchanged. Week 2 closes at minus £600: £700 plus no receipts, less £1,300 of outgoings. Week 3 then closes at £1,600 because the delayed £1,000 arrives alongside its original £3,000 receipts.

The final week still shows £1,400. That hides the earlier shortfall if you only look at the month-end figure. A negative projected balance identifies a problem to resolve before the due payments arrive; it does not give permission to miss a bill or assume borrowing will be available.

Check the expected receipt with the customer in writing, review genuinely optional purchases and discuss the position with your accountant if you cannot cover known commitments. If changing a payment arrangement is necessary, agree it with the supplier or other party. Do not quietly move the due date on the plan and treat that as approval.

Update the plan from what actually happened

At the end of the week, replace estimates with actual receipts and payments. Mark which amounts did not arrive, check any new commitments and move the horizon forward by another week. Use a dated copy so you can see whether the problem was an omitted bill, an optimistic receipt date or a new decision.

You can give the desk the work of collecting invoices, matching receipts and keeping the follow-up list current. Keep decisions about new spending, payment arrangements and finance with the authorised person. If a figure cannot be confirmed, mark it as unresolved and name the person who needs to answer.

• Check the bank and mark actual money received.
• Resolve the next overdue or uncertain receipt.
• Add orders and commitments made since the last review.
• Check the next two weeks for a shortfall or a buffer breach.
• Record the decision owner and next review date.

Use the free four-week cash-plan worksheet

The Invoice & Payment Pack includes a manual four-week cash plan, supplier commitments sheet, uninvoiced-jobs list and payment-stage planner. Put your own figures into the weekly blocks, check the arithmetic and print or save the completed plan before closing the tool.

The worksheet is manual. It does not connect to your bank or turn guesses into confirmed receipts. Start with the bills and invoices you already have, then decide which missing information you need to collect.

Stacked Out can organise the written payment admin, prepare invoices from approved job records and follow up with customers. We agree the tasks and approval limits with you first. We do not make inbound or outbound calls.