Cashflow buffer rules for wet, cancel-heavy months

From late October the weather starts making decisions for you. Outdoor jobs get rained off, customers cancel, and a week you had planned as full turns out half empty.

The bills do not move. Van finance, insurance, phone, fuel and the card terminal all go out on the same dates whatever the weather.

A buffer is what lets you say no to the wrong job and wait for the right one.

• Add up your fixed monthly costs and keep that much in reserve.
• Move tax money, and VAT if you charge it, to a separate account every time you are paid.
• Bill on the day and flag any customer who pays late more than once.
• Take a deposit on jobs where you buy materials.
• Plan for a lighter month and treat a busy one as a bonus.

List everything that leaves your account every month whether you work or not: van payment, insurance, phone, software, loans, rent on a unit or storage.

That total is your buffer target. Write the number down.

Build it slowly if you need to. £50 from every job adds up faster than waiting for a big month that never quite comes.

Once you have one month, aim for two. One month covers a bad fortnight. Two covers an injury, a van off the road or a long run of cancellations.

If you are a sole trader, part of every payment belongs to HMRC. You just pay it later.

A common rule of thumb is to set aside 20% to 30% of your profit for Income Tax and National Insurance. That is usually more than you will owe, which is the point. Your accountant can give you a closer figure.

If you are VAT registered, the VAT on every invoice is HMRC's from the day you are paid. Move it out straight away.

Use a separate savings account or a pot with your bank, and do it on the day the money lands. Money left in the working account gets spent on fuel.

January is when it bites. If last year's bill was over £1,000, the January payment is usually the balance for last year plus a first payment towards this year.

Cash coming in late hurts most when work is thin.

Send the bill the day you finish, with the due date on it.

Keep a short list of customers who have paid late before. Take a deposit from them next time, or ask for payment on completion.

Clear anything overdue before the end of November. December is a hard month to collect in.

A cancelled job is not just a lost day. If you have bought the materials, it is money out with nothing coming in.

Take a deposit that covers the materials on any job where you order ahead, and put your cancellation terms in the confirmation.

Keep a short list of indoor or nearby jobs you can pull forward when an outdoor job is rained off. A filled day is the best cash protection there is.

Say your fixed costs are £1,200 a month and you normally earn £4,000.

A wet November with four rained-off days and two cancellations takes you down to £2,600.

With no buffer and no tax pot, you pay the £1,200, live on £1,400, and January's tax bill arrives with nothing set aside.

With a £1,200 buffer and a tax pot filled all year, November is tight but nothing is missed, and January is already covered.

• Add up your fixed monthly costs.
• Open a separate account or pot for tax, and VAT if you charge it.
• Move this week's share in today.
• List every unpaid bill and chase anything overdue.
• Write down three indoor or nearby jobs you could pull forward on a wet day.

To a customer whose outdoor job is rained off:

Hi [name], the forecast for [day] means I cannot do your [job] safely or properly. I would rather move it than do it badly. I can do [day] or [day]. Which suits? Your deposit carries over to the new date.