Is Your Cash Flow Actually Healthy?
Plenty of trade businesses are busy, profitable on paper and permanently short of cash. The cause is nearly always process: when you invoice, what you ask for up front, and what happens when someone does not pay. Eight questions show where yours stands.
Answer for how things actually run in a normal month, not how you intend them to run.
Cash Flow Health Scorecard
Answer for how things actually run, not how you intend them to.
A quick self-check to point you at the right fix, not financial advice. Nothing you enter is recorded or sent anywhere.
What the Score Tells You
The score measures the habits that decide when money arrives, not how much work you do. A busy business with weak habits scores low, and that low score is the reason the bank balance never matches the invoices.
Speed is the biggest factor
The gap between finishing a job and invoicing it, and the gap between quoting and invoicing on longer jobs, decide how long you fund the work yourself. Most cash-flow trouble in trades is money that has been earned but not yet asked for.
Deposits and terms set the rules
A deposit on anything sizeable and clear payment terms on every invoice mean the customer knows what is expected before the work starts. Without them, every invoice is a negotiation and every late payment is a surprise.
Reminders are where the money is
Most late payment is forgetting, not refusing. A fixed reminder process, run the same way for every customer, collects most of it without a phone call. If reminders happen only when you remember, they happen rarely.
How the Score Works
Eight questions, each scored from zero to three, for a maximum of twenty-four. Your result is shown as a score and a percentage, and placed in one of three bands.
Getting money in early
Deposit policy and materials markup. Whether the customer funds the job, or you do.
Asking for it quickly
Invoicing speed after a job, and the time between quote and invoice on longer work.
Setting and enforcing terms
Payment terms on the invoice, the share of invoices that go overdue, and what happens when they do.
Knowing where you stand
Weekly bookkeeping. If the books are a month behind, every other answer is a guess.
The Three Habits That Fix Cash Flow
Nearly every trade business scoring in the lower two bands is missing at least one of these. Each is a process change, not a spending one.
Take a deposit and mark up materials
A deposit before the job starts means the customer is funding the materials rather than your overdraft. A consistent markup on materials means the time spent sourcing, collecting and stocking them is paid for. Together they stop you being the bank for every job you do.
- Set a deposit rule by job size and apply it every time
- Put the deposit request on the quote so it is expected
- Use the same materials markup on every quote so it is quick and defensible
- For long jobs, invoice in stages as work is completed
Invoice from the driveway
The invoice sent on the day gets paid sooner than the one sent on Sunday night, and far sooner than the one sent at the end of the month. Invoicing from your phone before you leave the site takes a couple of minutes and is the single biggest change most tradies can make to when money arrives.
- Invoice before you drive to the next job, not that night
- Have the customer's email and mobile before the job starts
- Put payment terms, bank details and a pay-now link on every invoice
- Send from your job system so it is logged and can be chased
Run reminders and books on a schedule
A reminder before the due date, another a week after, and a call after that, sent the same way to every customer. And half an hour a week reconciling the bank and checking who owes what. Neither is hard. Both fail when they depend on remembering.
- Automate the reminder sequence so it runs without you
- Block the same half hour every week for the books
- Check the overdue list weekly and act on it, not monthly
- Escalate the same way every time so customers learn you follow up
Next Steps
Unpaid Invoice Cost Calculator
Put a monthly dollar figure on the overdue invoices the scorecard found.
Calculate the cost →Tradie Business Admin Audit
Invoicing and bookkeeping are two admin jobs of many. See which ones eat your evenings.
Audit your admin →Best Job Management Software for Tradies
Most of the habits above are built into job management tools. Compare the options.
Compare software →Frequently Asked Questions
What is a good score?
Above seventy-five per cent means the habits that control when money arrives are in place, and any cash pressure you feel is more likely to be about margin or volume than process. Between forty-five and seventy-five is where most small trade businesses sit, usually with one or two specific gaps rather than a general problem. Below forty-five means the business is funding its customers, and the fixes are all process changes that cost nothing to make.
I am profitable. Why am I always short of cash?
Because profit is measured when the invoice is raised and cash arrives when the invoice is paid. If you pay for materials and wages during the job and get paid weeks after it, you are funding the gap from your own account. The longer the gap, and the bigger the jobs, the more of your money is tied up in other people's projects. Deposits, faster invoicing and reminders all shorten that gap. Nothing about the profit has to change.
How big a deposit should I ask for?
Enough to cover the materials and any labour you have to pay before the customer pays you, and a rule you can apply the same way every time. Many tradies use a simple threshold, with no deposit on small jobs and a set share on anything above it. The exact figure matters less than having a rule, putting it on the quote, and not starting until it has arrived.
What payment terms should I use?
Shorter than you probably use now, stated clearly on the quote and the invoice, and the same for everyone unless you have agreed otherwise in writing. Long terms exist because larger businesses have payment runs, not because your customers need a month to pay a plumber. For homeowners, payment on completion or within a few days is normal. For builders and agents, agree terms before the job and put them on the quote.
Do I really need to do the books every week?
You need to know who owes you what, and whether the bank balance matches what you think it is, often enough to act before a problem grows. Weekly is the shortest interval that fits around a working tradie and still catches an overdue invoice before it is a month old. A single half hour, at the same time every week, is enough for most sole operators once the bank feed is connected to the accounting software.
Is my score saved anywhere?
No. It runs entirely on your own phone or computer, nothing is sent to us, and there is no sign-up or email required to see the result. Take a screenshot if you want to keep it. The questions only ask how you run the business; no customer or financial figures are requested.
Found the Gap?
Whichever question scored lowest is where your cash is leaking. Tell us which one and we will show you the cheapest way to close it, including the fixes that are just a change of habit.