Invoice the same day or within 24 hours of finishing the job, take a 50% deposit upfront and move to 7 or 14 day payment terms. Cash Flow is how money moves through the business, and timing matters as much as the revenue figure.
What is Cash Flow?
Cash Flow covers invoice timing, payment terms, deposits, gross margin and overhead control. The question is whether the business keeps enough of what it earns and gets it fast enough. It’s the fourth of the Four Flows. It’s the constraint when cash is tight despite good revenue, GST and provisional tax create panic, debtors run slow or the owner is checking the bank at 11pm.
How quickly should I invoice?
Same day, or within 24 hours of completing the job. Every day you wait is a day you’re funding your client’s business.
Should I take a deposit?
50% upfront is the standard I use. It pays for materials and cuts how much of your money is tied up in unfinished work.
What payment terms should I set?
7 or 14 days. Frame it as a business decision, not a personal one.
What debtor follow-up rhythm works?
24 hours overdue, send an email. At 48 hours, call. At 7 days, send a formal notice. Run the same rhythm every time, including for the clients you like.
Is the debtor list the real problem?
Check payables first. Many owner-operated businesses code supplier costs straight off the bank feed with no bill tracking, so an aged payables report looks empty while nobody knows what’s owed. That’s the absence of a process. A simple spreadsheet of bills fixes it.
Then open a separate account for tax and set aside GST and provisional tax every week.
How much is 1% of gross profit worth?
On $1m revenue, every 1% of gross profit is $10k a year. Review every cost, cancel the subscriptions nobody uses and renegotiate supplier terms.
What does a Cash Flow fix look like?
My client ended up with an extra $17k a month in the bank.
Where do I start?
The free Profit Consult is 45 minutes on Zoom. Bring your P&L and I’ll tell you which flow is blocked.
Book a free Profit Consult: https://calendly.com/jung-jung/profitconsult
When did you last check your bank balance at 11pm?