Getting paid, 29 October 2026
Busy but broke: why a full diary can leave no cash
You can be busy and broke because you pay wages, subbies and merchants weeks before customers pay you, so more work means more cash tied up. Monthly costs of £36,000 with a 45-day wait to be paid means carrying about £54,000. Add jobs that lose money, retention held back and a VAT bill, and a full diary can still leave the account empty.
Why does a busy firm run out of cash?
Because the money goes out first. You pay this week's wages for work you'll invoice when the job finishes, and the customer pays 14, 30 or 60 days after that. Every extra job adds to what's out and not yet back.
The rough size of the gap is your monthly costs multiplied by the days between paying for the work and being paid for it, divided by 30. Try your own figures.
Your numbers, not a promise. Change any figure to match your firm.
The default shows £36,000 of monthly costs and a 45-day wait: £36,000 × 45 ÷ 30 = £54,000 tied up before a penny comes back. That money has to come from somewhere: your bank balance, an overdraft, late-paid suppliers, or HMRC money you're holding for VAT.
How does growing make it worse?
Every extra person on the tools adds to monthly costs before the extra income arrives. The firm in this example is profitable and still gets squeezed.
A six-person roofing firm takes on a seventh person
Monthly costs before the hire: wages, materials, vans, overheads.
| Monthly costs with six peopleassumed | £30,000 |
| Cash tied up at a 45-day wait£30,000 × 45 ÷ 30 | £45,000 |
| Extra monthly cost for one more roofer and materialsassumed | £6,000 |
| Monthly costs with seven people£30,000 + £6,000 | £36,000 |
| Cash tied up after the hire£36,000 × 45 ÷ 30 | £54,000 |
| Extra cash needed to grow£54,000 − £45,000 | £9,000 |
That's why firms often feel worst off straight after a good month. The work is done, the costs are paid, and the money is still in other people's accounts.
Are some of your jobs losing money?
Often, yes, and a busy diary hides it. If a job costs more than it pays, doing more of them makes things worse.
I didn't even understand how to price in overheads. When they run over by one day, that's all the profit gone.
He was turning over about £75,000 since April and working on admin until one or two in the morning. A renovation builder we work with said "I don't know if I'm making money on jobs" and "I nearly went bust a few times" before he had cost per job and a cash flow forecast. Busy firms with no job costing can't see which work to turn down.
Start by working out your overheads per man-day, then check each finished job against its price. Job costing for trades shows how to set it up.
What else drains cash from a busy firm?
Five things show up again and again. Check each against your last three months.
VAT is the one that bites hardest. If you're VAT-registered and charging 20%, a fifth of what lands in the account belongs to HMRC. Treat it as theirs from the day it arrives.
How do you fix it?
Shrink the gap from both ends: get paid sooner, and stop paying for losing work.
- Invoice on the day the job finishes.
If there's a backlog, clear it first.
- Take deposits and stage payments on bigger domestic jobs.
They put money in before the costs go out. See deposits and stage payments.
- Set payment terms and chase on day one.
- Price from your own costs.
Recheck your day rate against how to price a job before the next quote.
- Diary every retention release
and chase it. See retentions.
- Keep a 13-week forecast.
It shows the week you'll run short while you can still do something about it. See cash flow forecasting.
If you've done all of this and the gap is still there, talk to your accountant about whether you need working capital: an overdraft or a facility sized to the gap the calculator shows. Lenders find that easier to agree when you can show the forecast.
Where Nexley fits
Nexley is the AI back office for UK trade firms: five AI assistants run your tenders, quotes, buying, scheduling and invoicing. It connects to the tools you already work in, you run it all from WhatsApp, and you approve everything. £799 a month.
For cash flow, Nexley keeps every supplier bill and invoice up to date, tags them to jobs so you can see which ones made money, and chases overdue invoices on a schedule you approve. It sends you the next few weeks of cash on WhatsApp and flags a gap before it arrives.
Common questions
Why do I have no money when I'm making a profit?
Profit counts work when it's done; cash counts it when it's paid. If customers pay 45 days after you've paid wages and materials, your profit is real but sitting in their bank account.
How much cash should a small trade firm keep?
Enough to cover the gap between paying out and getting paid, plus the next VAT bill. The calculator above gives a starting figure for the gap; your forecast shows the low point.
Does taking on more work fix a cash flow problem?
Usually not on its own. More work raises your costs before it raises your income, so the gap grows first. Fix pricing and payment terms before you grow.
Is it normal to struggle with cash in the first years?
Many growing firms do, because each step up in size needs more cash to carry. That's why deposits, prompt invoicing and a forecast matter more as you grow.
Sources
Every rule, rate and date above was checked against these sources on the date shown at the top.
Topic: Getting paid
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