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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?