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I have £2 in my business bank account – more about cashflow

September 15, 2017

So I looked at my business account today and I have £2 in it.

Two pounds.  I was absolutely mortified.

It costs virtually nothing to run my business, a few hundred pounds a year on various subscriptions (and some project-based expenses which are eventually reimbursed) but that’s about it.  I usually keep a reserve of about £200 in my business account to cover incidental expenses such as transport and coffee and that has always been more than enough.  Well over the last few months I have spent a bit and spent a bit and now there’s £2 in there.

How has this happened?

I’ll say up front that over the course of the year I make a really decent living from this business and that if anything I am ahead at the moment with how much income I have secured for the financial year.  I’ve been doing this for seven years very successfully and I’ve always had plenty of work.

Cashflow-wise though, things have just worked out really badly this year.

I’ve described before how my billing goes – I can generally bill after I’ve completed a job.  I’ve also described that I’m not typically paid until a few weeks after I send the invoice.

So I started the financial year with two jobs and I’ve got four jobs on at the moment (which is a normal or even high amount) but just the way the billing cycles have worked out for these jobs means I have not yet been paid anything this financial year.  Yup, let that sink in.  Nothing.  Since April.  Yet I’ve been working pretty consistently.

I have had the opportunity to put in one invoice*, and (as is the case with 35% of my income so I’m not attributing any personal blame) it has not been paid within its 30 day terms.

So I went into my account today expecting payment from that invoice, but instead I had £2.

Which isn’t great because my Surveymonkey subs are due tomorrow and my professional membership subs are due next week.  I’ve had to put Surveymonkey on the credit card.  As a little added fun extra, my website provider has ‘automatically’ upgraded me to a ‘better’ account and charged me for that.  We’ve had words.  So I’ll be getting a refund of £40.  Then I’m assured my outstanding invoice will be paid by Tuesday so everything should come back together, and on we go.

But I hate this, if I’m honest it made me totally panic.  It knocked my confidence and I felt like I was doing a bad job of running my business.  The realisation of how close I was to going overdrawn was a serious shock to the system.  I was mortified.

Cashflow cashflow cashflow.

That’s all it is.

I’ve said it before and I’ll say it again there is absolutely no way I could run this business if my husband didn’t have a more regular income.


* Edit: That’s the simplified version. The long version is:

Project 1: Billed start (March), trying to finalise report.
Project 2: Billed start (March), trying to finalise report.
Project 3: Billed start (August), money outstanding.
Project 4: Billed start (Sept), money outstanding but not overdue.


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