As a subcontractor, you have a challenging job that requires great deal of patience, leadership, and planning for unexpected events that happen almost every day. Maintaining a healthy cash flow and keeping enough cash on hand to pay vendors and employees is one of the most important items subcontractors need to focus on. With some common sense, good strategies in place, and attention to details you can begin to improve your cash flow cycle and maintain better control of your budget. Let’s take a look at some points you need to consider before you take the next job for your contractor.
- Before your next project begins, you should chart the cash that you need for a job, when you need it, and how often your contractor needs to pay you. In essence, you’ll be tracking the cash conversion cycle with which you have to operate your business; be sure to include all aspects of the building process, your accounts receivable, collections, and accounts payable. For your security and ability to honour your own financial obligations you should make this cycle as compact as possible so that you get money in, distribute it, and move forward in the cycle.
- Visit www.ultimatefinance.co.uk before your next contract begins so that you can see the options you have for financing this project. You’ll find a tried and trusted strategy for bridging the period between actually raising applications and receiving your compensation. Another advantage of this programme is that it allows you more capital with which to work without stretching yourself and your account. Keep in mind that this service is confidential, so this will be a business matter of which only you will be aware.
- Always anticipate something unexpected occurring on the jobsite; from employees not reporting for work to materials that are substandard or completely wrong being delivered, your job is filled with management skills that require your undivided attention. Money is one of the crucial elements that keeps your company working and enjoying some of the benefits you like to experience. Taking steps to ensure that the payroll will be met, vendors will be paid, and customers will be pleased with work and will continue to meet their scheduled payments is a wise strategy to follow.
- The planning you do before, during, and after your job can impact the amount of success you enjoy as a subcontractor. If you have a good reputation for paying your crews and taking care of them, you’ll have a loyal group who stands with you no matter what challenges you face. Just knowing that they are going to get paid without having to search for you at the end of the week is very important to the crew that works for you.
Careful planning, close monitoring of details, and having a back-up plan can all be strong strategies that keep your company running like a well-oiled machine. Take time to study your past history with cash flow management so that you can avoid making the same mistakes on your next job. As you grow with your management skills the job will become easier and your financial reputation will be well-known.
