You just finished a $15,000 job but your account is empty. Cash flow kills more tradie businesses than bad workmanship. Here is how to stop living job to job.
The #1 Cash Flow Mistake
Charging too little upfront. If you are buying all materials and paying workers before getting paid — you are a bank, not a tradie.
Fix Your Payment Terms
- Minimum 30% deposit before any work starts. Covers materials.
- Progress payments at key milestones.
- Final payment due on completion — same day, not "within 30 days".
- Add late payment fee to your contract (2% per month).
📋 Payment Split
The 40/30/30 rule: 40% deposit, 30% at halfway, 30% on completion. Or 50/50 for smaller jobs under $5,000.
Invoice Immediately
Most tradies wait until Friday to send invoices. Invoice the same day the work is done — or have the client pay on the spot via EFTPOS.
Separate Your Tax Money
- Open a second bank account labelled "Tax & GST"
- Transfer 25% of every payment into it immediately
- Do not touch it — it belongs to the ATO
Build a Cash Buffer
Goal: 2 months of business expenses in reserve. Includes your wage, insurances, vehicle costs, and loan repayments.
🧮 Calculator
Use our Pay Calculator to work out your buffer needs.