Cash Flow & Payments
Separate profit from cash, forecast payment timing and identify shortfalls before money is due.
topicStart with the decision
An invoice does not pay a supplier until the customer pays you. A useful cash forecast follows expected bank movements and makes delays visible. Start with timing before using a single runway figure.
Understand the difference
Compare invoiced revenue with the money available to spend.
Build a rolling forecast
Work through a four-week example and a late-payment scenario.
Check your runway
Use an average only when it represents the periods ahead.
Check the payment gap
Compare upfront costs with the cash available before final payment.
Questions this topic covers
Can a profitable job create a cash shortage?What if a customer pays two weeks late?How much deposit covers the cash gap?What happens if a receipt is late?What does an early-payment discount cost?Examples use hypothetical figures with checked arithmetic. Read the methods and limits.
Guides and examples
How to build a short-term cash flow forecast
Follow a four-week cash forecast, distinguish receipts from invoices and test the effect of a customer paying two weeks late.
How to plan deposits and milestone payments around job costs
Map project payments by date, calculate the deepest cash gap and test whether a deposit or milestone arrives in time.
How to stress-test cash flow for a late customer payment
Move an expected receipt to a later date, reconcile the lowest balance and measure the shortfall without confusing delay with bad debt.
Key concepts
Early-payment discount versus standard terms
Measure the cash and margin cost of an early-payment discount, and understand what its annualized comparison does and does not mean.
Profit vs cash flow: why a profitable job can leave a cash gap
Compare the economics of a completed job with the timing of customer receipts and supplier payments using a two-period example.
