Getting paid, 29 October 2026
Cashflow forecasting for small trade firms
A cash flow forecast lists the money you expect in and out each week, starting from today's bank balance, so you can see a shortfall before it happens. For a small trade firm, a 13-week forecast in a spreadsheet is enough. Put money in on the day you expect it to land, not the invoice date, and include VAT, PAYE and CIS payment dates.
Why do trade firms need a cash flow forecast?
Because profit and cash arrive at different times. You pay wages weekly and merchants monthly, and clients pay you 30, 60 or more days after the work. A firm can be profitable on paper and still miss a payroll.
Plenty of owners keep every job in one spreadsheet and still have no view of the weeks ahead. A renovation builder we work with told us "I nearly went bust a few times" before he had a forecast; it was one of the features he valued most once his supplier bills and invoices were up to date in Xero. If you feel busy but broke, a forecast is where the cause shows up.
What goes into a trade firm's forecast?
Two sections and a balance line. Keep the rows few enough that you'll update them.
Opening bank balance | last week's closing balance MONEY IN Domestic final invoices | when the customer usually pays Deposits and stage payments | on the stage date Commercial valuations | due date + the client's real payment lag, less retention Retention releases | on the release date, if you've chased it Other | VAT refund, asset sale MONEY OUT Wages and subbies | every pay day Merchant accounts | on each account's due date Plant and skip hire Van finance, insurance, phones, software | on the debit date PAYE and NI | by the 22nd of the month CIS deductions you've made from subbies | with PAYE, by the 22nd VAT | one month and seven days after the quarter end Corporation Tax or Self Assessment | on the due date Loan repayments and director's drawings Net movement | money in − money out Closing balance | opening + net movement
The per-job tracker gives you the commercial rows: each job's next valuation, its value and when the client pays.
Which tax dates catch trade firms out?
The quarterly and annual ones, because they're big and they don't come round often enough to remember. Put them in the forecast the day you build it.
If cash timing around VAT is a recurring problem, ask your accountant about the VAT Cash Accounting Scheme. With taxable turnover of £1.35 million or less, you pay VAT on sales when the customer pays you rather than when you invoice. It doesn't suit every firm, so check before you switch.
A worked eight-week forecast
Here's a five-person building firm starting November with £14,000 in the bank. Wages and subbies run about £6,500 a week. The VAT quarter ended on 30 September, so £11,400 of VAT is due on 7 November. That's a Saturday, so unless you pay by Faster Payments it must reach HMRC by Friday 6 November.
| Week starting | Opening | In | Out | Closing |
|---|---|---|---|---|
| 2 Nov | £14,000 | £4,200 | £19,900 | −£1,700 |
| 9 Nov | −£1,700 | £12,600 | £6,500 | £4,400 |
| 16 Nov | £4,400 | £3,800 | £13,100 | −£4,900 |
| 23 Nov | −£4,900 | £15,750 | £10,700 | £150 |
| 30 Nov | £150 | £9,500 | £6,500 | £3,150 |
| 7 Dec | £3,150 | £14,200 | £6,500 | £10,850 |
| 14 Dec | £10,850 | £3,900 | £6,500 | £8,250 |
| 21 Dec | £8,250 | £8,800 | £13,200 | £3,850 |
Where the money goes in the first week
Week starting 2 November, opening balance £14,000.
| In: kitchen final invoicepaid 3 days late, as usual | £4,200 |
| Out: wages and subbiesweekly | £6,500 |
| Out: VAT for July to Septemberdue 7 November | £11,400 |
| Out: van finance and insurancemonthly debits | £2,000 |
| Out in total£6,500 + £11,400 + £2,000 | £19,900 |
| Closing balance£14,000 + £4,200 − £19,900 | −£1,700 |
On paper this firm is fine: by Christmas it has more coming in than going out. But two weeks in November go overdrawn, the second by £4,900. Seeing that on 26 October gives the owner time to fix it.
What do you do when the forecast shows a gap?
Move money in earlier or money out later, in that order. Borrowing is the last step, and banks lend more readily to a firm that shows them a forecast.
- Bill what's finished now.
Any job done and not invoiced is the fastest cash you have. See clearing an invoice backlog.
- Chase what's overdue.
A polite call on day one beats a letter on day 30. Use how to chase an unpaid invoice.
- Take deposits and stage payments on domestic work.
They turn a three-week wait into money up front. See deposits and stage payments.
- Move a purchase.
Order materials for the January job in January.
- Talk to HMRC early if a tax bill won't fit.
GOV.UK has a page on what to do if you can't pay your tax bill on time; asking before the due date goes better than after.
- Then talk to the bank,
with the forecast in hand.
Retention held by main contractors is often the biggest sum missing from a forecast. If you're owed it, put the release dates in and chase them; see retentions.
Can software do the forecast for you?
Partly. Xero's cash flow manager projects your bank balance from invoices due, bills to pay and recurring transactions. As of October 2026, its UK page shows a 30-day view on Ignite, 60 days on Grow, 90 on Comprehensive and 180 on Ultimate. You can add expected payment dates to overdue invoices and one-off amounts to test scenarios.
It's only as good as what's in Xero. Wages, subbies and jobs you haven't invoiced yet won't be there unless you add them, which is why many small firms keep a spreadsheet alongside it.
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 your invoices and supplier bills up to date, adds the stage payments and valuations from your live jobs, and sends you the next eight weeks over WhatsApp with any gap flagged. It chases overdue invoices on a schedule you approve, so the money in arrives when the forecast says it will.
Common questions
How far ahead should a trade firm forecast?
Thirteen weeks is a good default: long enough to catch a VAT quarter, short enough to be accurate. Add a rough monthly view for the year if you're planning a hire or a van.
Should I forecast from invoices or from the bank?
Start from the bank balance and enter income on the date you expect the cash to land. Invoice dates tell you when you're owed it, not when you'll have it.
What's the difference between a cash flow forecast and a budget?
A budget plans profit over a year. A cash flow forecast tracks timing week by week, including VAT, loans and drawings that don't show up as profit or cost.
How often should I update it?
Weekly, at the same time each week. Replace forecast numbers with what happened, roll forward a week, and check the next lowest point.
Sources
- GOV.UK: When to do a VAT Return
- GOV.UK: Pay employers' PAYE
- GOV.UK: Pay your VAT bill
- GOV.UK: Pay your Corporation Tax bill
- GOV.UK: VAT Cash Accounting Scheme
- GOV.UK: What you must do as a CIS contractor
- Xero UK: Cash flow forecasting
- Xero UK: Cash flow forecast guide
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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