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Contract cash flow calculator.Pay weekly. Get paid in 45 days.
Work out how much cash your contract book ties up between paying contractors and being paid by clients, what each new contractor adds, and what invoice finance would cost you.
Your contractors
Pay plus employer costs
What the client is charged
When you pay them
When clients pay you
Timesheet approval
Invoice finance
Of everything you invoice
On the money you draw
You pay for each day’s work 37 days before the client pays you for it.
Every day sooner your clients pay frees up £3,143. Each new contractor ties up another £5,814.
| From work done to paying the contractor | 8.5 days |
|---|---|
| From work done to the client paying | 45.5 days |
| Gap you fund | 37 days |
| With invoice finance | Amount |
|---|---|
| Available to draw | £136,000on £160,000 of unpaid invoices |
| Cost a year | £23,8637.6% of gross profit |
| Cash you still need yourself | £0 |
How the cash position is worked out.
Days to pay contractors is half the pay period (3.5 days for weekly pay, about 15 for monthly), because work is spread across the period, plus the days after the period ends that you pay.
Days to be paid is half the invoice period, plus the days it takes to raise the invoice, plus the payment terms, plus how late clients pay on average.
Cash tied up is the gap between the two, multiplied by what your contractors cost per day. It grows in step with the number of contractors you place.
Invoice finance can advance the percentage you set on invoices already raised and not yet paid. Its yearly cost is the service fee on everything you invoice plus the discount charge on what you draw, which is the lower of what you need and what’s available.
This is a steady-state estimate for planning. Real cash moves in steps around paydays and payment runs.
Why does a profitable contract desk run short of cash?
Because you pay contractors long before clients pay you. If contractors are paid weekly and clients pay 30 days after a weekly invoice, every day of work is funded by you for well over a month. The more contractors you place, the more cash that ties up, so a fast-growing contract book can run out of cash while making a healthy margin.
How is the cash tied up worked out?
It’s the daily cost of your contractors multiplied by the gap in days between paying for a day’s work and being paid for it. The pay side runs from the average day worked to payday. The client side runs from the average day worked, through invoicing, payment terms and any late payment, to cash in the bank.
How does invoice finance work?
A finance provider advances a share of your unpaid invoices, commonly 80–90%, and is repaid when the client pays. You usually pay a service fee on everything you invoice plus a discount charge, like interest, on the money you draw. Unbilled work, such as days not yet on an invoice, can’t be funded, so some of the gap stays yours to fund.
What’s the fastest way to free up cash?
Shorten the gap. Invoicing weekly instead of monthly, getting timesheets approved faster, agreeing shorter payment terms and chasing late payers all bring cash in sooner. The calculator shows how much each day saved is worth for your book.
Does this include VAT or sales tax?
No. Use amounts before tax. VAT is collected from clients and paid to the tax authority on its own timetable, which can help or hurt cash flow depending on when your returns fall due.
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