Managing Cash Flow for Freelancers and

ContractorsAndy Bailey | 18 November 2016

Andy Bailey: Product and Commercial Manager

Accountant and Tax Advisor

Tax Software Projects Coordinator

Lead Business Analyst

Senior Product Manager

Product and Commercial Manager

Introduction

• What is Cash Flow?

• Why Is Cash Flow Important?

• How Can I Manage Cash Flow?

What is Cash Flow?Cash In Flow Cash Out Flow

Cash Flow Example December £

Freelance work 2,500

Sale of laptop 200 Bank interest 10

Cash Inflows 2,710

Mobile Phone 50 Broadband 40 Travel 100 Insurance 20

Wages 1,000

Cash Outflows 1,210

Net Cashflow 1,500

Why is Cash Flow Important?

Cash Flow Problems

Example December £ December

Freelance work 2,500 Freelance work -

Sale of laptop 200 Sale of laptop 200 Bank interest 10 Bank interest 10

Cash Inflows 2,710 Cash Inflows 210

Mobile Phone 50 Mobile Phone 50 Broadband 40 Broadband 40 Travel 100 Travel 100 Insurance 20 Insurance 20

Wages 1,000 Wages

1,000

Bank changes 25

Cash Outflows 1,210 Cash Outflows 1,235

Net Cashflow 1,500 Net Cashflow (1,025)

Cash Flow Solutions - Invoicing

• Invoice promptly

• Invoice regularly

• Early payment discounts

Cash Flow Solutions - Banking

• Keep a positive bank balance

• BUT Arrange an overdraft/ credit line

• Maintain a contingency ‘rainy day fund’

Cash Flow Solutions - Management• Hire great professional advisors

• Regularly review cash flows

• Cloud based software

Software Solutions

Questions

Summary

• What is Cash Flow?

• Why Is Cash Flow Important?

• How Can I Manage Cash Flow?