Tax!

[combined tree services]

its a matter of organising yuor money, thats why i told you to work out what size of an overdraft you needed before you took on the work, have the paperwork set in place so when a customer pays late, they are paying your charges, have it all signed before you start the work, that is why commercial work is such a nightmare. the bank will have a bit of come and go, especially if you have the invoices in your hand, the vat man will want it there and then as will mr tax man. speak to the bank, most of the guys i know that chase commercial work have a deal with the bank, they pay your invoice straight away less a percentage and then they chase the money. this is why i do domestic work:001_smile:

 

Lloyds have a scheme like that called factoring , however as i found with my local utility company if i put my invoice to them through this scheme they WILL pay after two months insted of the 28 days as stated in there contract , so i would still lose .

[Highland Forestry]

I looked into factoring my invoices last year and discovered that yes you can get paid straight away less the percentage charged by the bank or the factoring company, but if your customer fails to pay on time then the factoring company take the money back off you!

[combined tree services]

I looked into factoring my invoices last year and discovered that yes you can get paid straight away less the percentage charged by the bank or the factoring company, but if your customer fails to pay on time then the factoring company take the money back off you!

 

thats also what i was told when i looked into it , also i have heard of some contracts stating that factoring or any similar scheems will not be allowed !

[woodplans]

The one benefit of working under the CIS scheme for a big chunk of my work is that i do not have to worry to much about saving for the Tax Man, Vat is a different matter.

I find what does help is to save all my large purchases until the end of the quarter, this way you have the VAT cash back in the bank within a few weeks, it is worth planning your equipment purchases this way, as it really helps with cash flow.

A couple of my commercial clients work on a 90 days terms, I now try and avoid doing to much for them as this really screws the cash flow, plus in the current climate alot can happen in 90 days:thumbdown:

[Stephen Blair]

thats also what i was told when i looked into it , also i have heard of some contracts stating that factoring or any similar scheems will not be allowed !

 

dont work for these folk then, they are dictating to you when they are going to pay you, when you go into a shop do you tell them when you are going to pay? no. this is why so many companies go down the tubes because of big firms. yet everyone chases it. if they dont pay then you are screwed, because it is usually some young guy, financed up to his nuts with no business sense what so ever against a professional business man/team. they take nothing personal into consideration it is just a deal a business transaction, if they say no and you say pretty please then you are screwed. and you are usually so busy and stressed you cant take 5 mins off to chase your money. i think you guys should take some time to read throught he stress thread properly and realise loads of us have tried what you are doing, big money jobs with loads of staff. the big companies see it like taking candy from a baby. they dont pay you one day and there is a queue of contractors waiting to do the job the next day. look at your turnover then look at your profit, then see how much of your profit you have in the bank:sad:

[Stephen Blair]

.

I find what does help is to save all my large purchases until the end of the quarter, this way you have the VAT cash back in the bank within a few weeks, it is worth planning your equipment purchases this way, as it really helps with cash flow.

 

QUOTE]

 

just defer the vat, claim it back off the invoice before you pay it, its legal. any finance company will explain this and so will the vat man:001_smile:

[combined tree services]

dont work for these folk then, they are dictating to you when they are going to pay you, when you go into a shop do you tell them when you are going to pay? no. this is why so many companies go down the tubes because of big firms. yet everyone chases it. if they dont pay then you are screwed, because it is usually some young guy, financed up to his nuts with no business sense what so ever against a professional business man/team. they take nothing personal into consideration it is just a deal a business transaction, if they say no and you say pretty please then you are screwed. and you are usually so busy and stressed you cant take 5 mins off to chase your money. i think you guys should take some time to read throught he stress thread properly and realise loads of us have tried what you are doing, big money jobs with loads of staff. the big companies see it like taking candy from a baby. they dont pay you one day and there is a queue of contractors waiting to do the job the next day. look at your turnover then look at your profit, then see how much of your profit you have in the bank:sad:

 

i can totally see your point shrek , i have been doing some subbying work for a large company i sent my invoice in to them on december the 1st and was hoping to be paid within the first 2 weeks of january , i was still waiting for my money on the 25 of feb it was not untill early march when i started taking lega action that they decided to pay instantly , from then onwards i have refused to do any work for them , however two other companies decided that they would carry on doing their work , they are now taking the company to court as they have been paid once or twice since feb !!! i personally would not like to do there work for free

[ukminch]

I'll second what SWB said, last year my take home was 10% of my turnover. This year it's going to be about 70%. I'm only working a few days a week but the money I earn is mine, I'm not chasing my tail to pay subbies, staff etc etc. If I don't get paid for 6 months now by one company it's a nice bonus when it does come in as I can survive on not very much.

 

You've got to make the mistakes yourself in the first place though, it's hard to learn from someone elses. If you can you'll do well!!

 

Interestingly I reckon my second year in business was my most successful so far, so I'm trying to go back to methods I used then to some degree.

 

Rob

[Mark Bolam]

I got so stressed about cashflow I changed my invoice terms to payment on completion and make this clear when quoting. If people don't like it they can get someone else in.

[Stephen Blair]

I got so stressed about cashflow I changed my invoice terms to payment on completion and make this clear when quoting. If people don't like it they can get someone else in.

 

me too mark, i only wait for one person now, it is 30 days exactly from completion date, and it is well worth the wait. everyone else, its money on the day, if they cant be there then they have signed the paperwork to say it is due within 7 days or there will be charges. i binned all my crap customers 2 years ago. pubs have the right idea, barr the idiots and look after your good ones. no point having one idiot ruining it for the others and forcing them to go elsewhere.