Every dollar figure on this page is invented to show the method. None of it describes a real Kerrville, TX business, and none of it is a funding offer.
How to prepare a cash flow forecast for a Kerrville, TX specialty contractor
A cash flow forecast is a list of the dates money will actually move, not a budget. For a specialty contractor in Kerrville, TX the hard part is the in-column, because a finished job can take weeks to pay. Five steps get a first forecast on paper:
- Start from the cash in the bank account this morning, not from the profit on last month's statement.
- Enter each expected customer payment in the week it should land, using how that customer has paid before.
- Enter payroll on its real paydays and materials on the dates the supply house expects to be paid.
- Add rent, truck notes and insurance in the weeks they come out of the account.
- Every Friday, replace the estimate for the week just ended with what really happened, and roll the forecast forward.
Building a 13-week cash flow forecast at a Kerr County, TX specialty contractor
Thirteen weeks is one quarter, long enough to show a payroll that lands before a large job pays and short enough to keep accurate. Illustration only, invented figures: a four-person HVAC and plumbing contractor starts with $16,500 in the bank, pays $7,400 of payroll every other week and $3,150 of rent, truck note and insurance every fourth week.
| Week | Cash in | Cash out | Ending cash |
|---|---|---|---|
| Week 1 | $4,200 | $14,450 | $6,250 |
| Week 2 | $14,800 | $2,100 | $18,950 |
| Week 3 | $0 | $12,000 | $6,950 |
| Week 4 | $16,500 | $1,800 | $21,650 |
| Week 5 | $0 | $15,750 | $5,900 |
| Week 6 | $0 | $2,400 | $3,500 |
| Week 7 | $19,800 | $10,700 | $12,600 |
| Week 8 | $6,400 | $1,500 | $17,500 |
| Week 9 | $2,200 | $14,650 | $5,050 |
| Week 10 | $15,900 | $2,600 | $18,350 |
| Week 11 | $0 | $11,200 | $7,150 |
| Week 12 | $8,700 | $1,900 | $13,950 |
| Week 13 | $18,300 | $13,250 | $19,000 |
The balance never goes below zero, but week 6 ends at $3,500: two weeks without a customer payment while a payroll, the rent and two materials orders go out. Over the quarter the contractor takes in $106,800 against $104,300 going out and ends $2,500 ahead of where it started, so the problem is timing, not volume. A forecast that shows a dip like week 6's is the moment to arrange a line of credit or stretch a supplier's terms, before the week arrives.
How Kerrville, TX specialty contractors can improve cash flow before borrowing
Some cash gaps close without any borrowing. These are steps a Kerrville, TX contractor can take first, and each one shows up in the next forecast:
- Bill at each stage of a job, rough-in, trim-out and final, instead of one invoice at the end.
- Ask for a deposit on special-order units and fixtures before ordering them.
- Ask the supply house for 30-day terms on the account, and pay on day 30 rather than at the counter.
- Sell the trailer or the old van that has sat unused since the fleet was replaced.
- Move sales tax and payroll tax money to a separate account the day it is collected.
- Call the customers more than 30 days late before the next payroll, not after it.
If the gap is still there after these, a working capital loan or a credit line can cover the timing, and the forecast itself is a useful page to bring to the first call.
Articles for Kerrville, TX specialty contractors and home builders
Six longer articles, each on one funding question for Kerrville, TX trades:
- Trailers, Mowers and Wood Chippers in Kerrville, TX: financing a landscaping crew's equipment.
- Are Practice Loans Secured in Kerrville, TX? What can stand behind a loan to a medical practice.
- Motel and Lodge FF&E Financing in Kerrville, TX: beds, case goods and poolside furniture, priced out.
- Fixed-Payment Loans for Kerrville, TX Shops: how a term loan schedule works for shops and builders.
- Revenue-Based Lending in Kerrville, TX: payments that rise and fall with sales.
- Applying for a Credit Line in Kerrville, TX: what a line of credit request includes.
By Bellshire Business Funding · Updated