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More whinging about cashflow

June 18, 2019

Part one million of my ongoing series whinging about my cashflow.

I’ve written about it before here and here and here.

Well, I have submitted by 9th tax return (swot, it’s only May) and I am pleased to say that so far all of my invoices have been paid in full.  Hurray!

But a significant number are still coming in late.

This year I’ve had an average time to payment of 20 days with 21% being paid beyond my 30 day terms.  The range has been between 0 and 56 days to payment.

graph 1

I don’t want you to think I’m in the business of slagging off my clients because that’s not the intention of this blog post.  No, my clients are invariably lovely to work with and there’s various reasons why this happens that are not down to them personally.  I’m not blaming any individual or any organisation I’m just looking for patterns to help me to sustain my business.

I’d love to be able to predict when income might come in, but this year one of my clients paid an invoice on day 0 and another invoice on day 45.  If you can’t even predict payment by a single client, then what hope is there?

Basically I have no idea what is happening!

I also have a seasonal business.  Sort of.  You wouldn’t think so, would you?  But even though I work pretty consistently through the year I find that my billing is very focused around the end of the financial year because of the way that charities and charity funding works.  So I find:

  • A lot of final invoices get scheduled for March.
  • Projects that were scheduled to end sooner but have drifted a little at the client end suddenly have a hard deadline of getting done by the end of March.
  • More new projects come in during Q4, to spend left-overs in yearly budgets.

So my cashflow is both unpredictable, and super-lumpy.

graph 2I’ve found the only thing I can do is ignore the whole issue.

I earn good money doing this job, and I genuinely love it.  But I’ve said it before and I’ll said it again: I probably couldn’t run this business it if I wasn’t part of a two income household.  It is too unpredictable.

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